How COVID-19 Will Change Restaurants Forever
As predictions of how and when businesses will reopen begin to surface, analysts predict a significant alteration of the restaurant industry.
Coronavirus impacts caused a loss of an estimated $25 billion in sales and more than 3 million jobs in the restaurant industry in the first 3 weeks of March. According to the National Restaurant Association, approximately 30,000 restaurants have closed for good, and more than 110,000 are expected to do so throughout April. On April 14th, California Governor Gavin Newson announced a regional planning effort between California, Oregon and Washington that would lift restrictions on businesses. Throughout the press conference, Newson acknowledged that restaurants would be seeing a new normal. “You may be having dinner with a waiter wearing gloves, maybe a face mask… Dinner where the menu is disposable… where your temperature is checked before you walk in the establishment.”
Jeff Chandler, CEO of the 35-unit fast-casual Hopdoddy Burger Bar, says curbside delivery “is here to stay” in restaurants. “People aren’t going to want to touch a kiosk,” Chandler said, referencing the contagious nature of the virus. Jose Dueñas, President of Coffee & Bagel Brands, which has 1,100 units of Einstein Bros. Bagels, Bruegger’s Bagels, Caribou Coffee, Noah’s New York Bagels and Manhattan Bagel, says the consumer will come out of the pandemic with a heightened demand for convenience. As the hospitality industry gradually reopens, consumers will come to expect and demand food service that accommodates social-distancing protocols, and restaurants will see a dramatic change in how they do business. .
Big and Small Restaurants Battle for Relief Funds
As a result of coronavirus shutdowns, the restaurant industry suffered an estimated $30 billion in losses in March and is expected to lose $50 billion by the end of April. Independent restaurateurs trying to stay afloat amidst the economic turmoil were outraged by Congress’s stimulus package released in March.
The first wave of the Paycheck Protection Program, totaling $250 billion in low-interest government loans, allowed big chains such as Shake Shack, Potbelly and Ruth’s Chris Steak House to receive tens of millions of dollars. Many smaller restaurants received nothing. The National Restaurant Association sent a letter to Congress on March 18th, requesting a recovery fund specifically for the independent restaurant industry.
“We need to get the money into the hands of independent restaurant owners,” said Andrew Rigie, executive director of the New York City Hospitality Alliance. But a restaurant-based relief plan has always been highly unlikely. While many large chains have the resources to last in a longer-term shutdown, most independent restaurants, which make up two thirds of the dining environment in the U.S., will keep struggling to survive. After strong criticism from independents, the Shake Shack chain returned its $10 million government loan, gaining capital elsewhere from an unrelated equity transaction.
Restaurant Leaders Named To White House “Economic Revival” Panel
Nearly two dozen restaurant industry executives were chosen to advise the White House on reopening the economy. The leadership panel includes representatives from big chain restaurants, such as McDonald’s CEO Chris Kempsczinski, as well as independent restaurants, such as Thomas Keller of Thomas Keller Restaurants. Marvin Irby, interim CEO of the National Restaurant Association, was also named to the group. The restaurant industry panel is one of 17 different advisory groups representing various facets of the economy from agriculture and business to sports and travel, known as the Great American Economic Revival Industry Groups. Via conference call, these groups will collaborate with White House representatives on reopening the economy in a coordinated “rolling recovery.” Restaurants have been particularly hard-hit by the coronavirus pandemic, laying off millions of workers, and its leaders are are eager to find solutions for the recovery and long-term health of the industry. .
