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Closing Restaurants
April 15, 2020
Coronavirus (COVID-19) is the largest viral outbreak in the past hundred years and has
already made an unprecedented impact on how businesses operate around the world.
For Alex Stupak, chef and owner of the Empellón restaurant group in New York, “Last
Thursday and Friday were the most difficult days of my career. I decided to shut my four
restaurants and was forced to tell 300 people that we were closed. I still can’t get over it.
I wasn’t the first operator to close, but I was one of them, and I was only comforted
when I saw the list getting longer and longer because it was good to see people make the
right decision. The one thing that made me feel better was knowing that this was
happening to all of us.”
Tiantian Qiu, who owns three restaurants in Los Angeles, is, likewise, in a bind. She
pays more than $30,000 in monthly rent to commercial real estate landlords. And the
coronavirus pandemic has caused her business to plummet.
At Hip Hot, her restaurant in Monterey Park, she estimates that revenue was down 75%
in February compared with the same month last year. And at Joy Kitchen on Friday, her
Arcadia restaurant served just three diners the entire day; one was to an employee of the
mall. “We made $100,” she said.
For chefs and restaurateurs right now, there are no clear answers. Try to weather the
storm? Close temporarily? Pivot to takeout and delivery only? For Stupak and Qiu, and
many other restaurant owners, the coronavirus pandemic is causing extreme financial
hardship as well as unexpected ethical dilemmas.
Restaurant owners are suddenly being forced to juggle several issues: a responsibility to
preserve public health, an obligation to care for employees, and a very real need to
simply stay afloat over the coming weeks.
Stupak admits, “I’m not, by nature, an optimistic person. I’ve been crushed, so I have to
keep trying to find the potential good in this. Maybe the biggest hope is that this exposes
the cracks in the system, and it makes us stronger. Right now the discussion is how do
we make sure we come out on the other side? Then can we ask ourselves how we use this
as an inflection point to make things better than ever.”
What's on the plate of the person sitting next to you? It turns out that trying a bite is no longer a problem! Sharing food is the new trend. Today, it permeates all levels of society. Whether its vegan snacks or exquisite appetizers at luxury restaurants, sharing food is everywhere today. One possible reason for this is the agony of choice in a huge menu offering. Having to decide on a single dish from an abundance of dishes can be difficult. Much more tempting is the possibility to taste different appetizers and then talk about them. In modern societies, groups of friends are increasingly taking the place of family and fixed partner structures, but the longing for family closeness and the warmth of a nest remains and is shifting to the restaurant. In a world often characterized by haste and individualism, this trend offers a soothing alternative. The idea of eating together not only promotes conviviality but also creates a special atmosphere in which guests can get closer and exchange ideas. It is a trend that encourages conscious consumption, as meals can be enjoyed more intensely in company. This “New Sharing” revolutionizes the traditional concept of individual enjoyment and opens up exciting possibilities for restaurateurs who want to offer their guests a unique experience. With specially designed sharing platters and "shareable dishes", everyone at the table can discover and enjoy the different flavors together. Implementing shared dining in restaurants, however, requires a rethink in terms of menu design, table arrangements and tableware. The selection of dishes must be varied and shareable in order to promote the experience of community. It is also important to arrange the tables in such a way that they offer sufficient space for the diverse bowls and platters that are central to this trend. From modern bistros and ethno-culinary restaurants to tapas bars and sushi joints, this trend is finding a place in a variety of gastronomic concepts. Whether in urban centers, tourist hotspots, or idyllic rural areas, sharing food connects people and creates a sense of community that is extremely attractive to many guests. For restaurateurs, the rethinking and redesigning can be a worthwhile investment in 2024. Events like family style dinners offer the opportunity to be different from the competition and offer guests an experience that will not only be remembered, but Instagemmable as well.
Though charcuterie first rose to prominence in 15th century France, meat-and-cheese boards have now spiraled into a massive trend on social media, propelling some enthusiasts to the status of "charcuterie influencer." A search for "charcuterie" on Instagram yields nearly one million results, and on Facebook there are hundreds of public and private groups dedicated to the art form. Influencers posting artsy photos of 'adult Lunchables' are blowing up among millennials with small living spaces and a passion for meat and cheese. "It blows my mind every time I open the app and have a hundred notifications or 2,000 new followers on TikTok," Maggie Johnson told Business Insider of her newfound social media stardom. On a whim, Johnson filmed herself in October washing cartons of blackberries and grapes over a marble-lined sink, carefully slicing wedges of cheese and opening packages of cured meats before arranging them ornamentally around a circular wooden board. Though she had been privately watching videos on TikTok for months, she decided to share her own video for the very first time, posting it to her page before heading into an early shift at the bakery where she works in Nashville, Tennessee. When she opened the app during her break, she was astounded to find that her post had thousands upon thousands of likes and comments. Three months later, she amassed more than 175,000 followers to her TikTok page @magsmeals, where she regularly shares charcuterie-related videos. Johnson — an epicurean at heart, who first started making charcuterie boards for her sorority sisters in college — discovered that she had unwittingly tapped into an obsession among young Americans suddenly seeking out charcuterie content unlike ever before. Though charcuterie itself has existed as a culinary delicacy for centuries, it only really flourished into a bona fidé social media phenomenon in the past year, marking those like Johnson as "charcuterie influencers" along the way.
Shoppers are feeling the pressure as inflation pushes up prices for gas, groceries and a range of other goods and services. While people still appear willing to shell out to travel, go to the movies or have a drink or two, surging prices and fears of a recession also have them pulling back in other areas. Alcohol is still a category that remains generally protected from economic downturns. People are going out to bars again after drinking more at home during the early days of the pandemic and, even as brewers, distillers and winemakers raise prices, companies continue to bet that people are willing to pay more for better-quality alcohol. “Consumers continue to trade up, not down,” Molson Coors Beverage CEO Gavin Hattersley said on the company’s earnings call in early May. It might seem counterintuitive, but he said the trend is in line with recent economic downturns. Alcohol sales have also been shielded in part because prices haven’t been rising as quickly as prices for other goods. Back in May, alcohol prices were up roughly 4% from a year ago, compared with the 8.6% jump for overall consumer price index. According to a survey from NPD Group, a consumer research firm, however, more than 8 in 10 U.S consumers report that they are planning to make changes and pull back on their spending in the next three to six months. “There is a tug-of-war between the consumer’s desire to buy what they want and the need to make concessions based on the higher prices hitting their wallets,” said Marshal Cohen, chief retail industry advisor for NPD. The restaurant industry is also seeing signs of potential trouble, although how eateries are affected could vary. Fast-food chains have traditionally fared better in economic downturns since they’re more affordable and draw diners with promotional deals. Some restaurant companies are also betting that people will keep dining out as long as grocery prices rise faster. The cost of food away from home rose 7.4% over the 12 months that ended in May, but prices for food at home climbed even faster, shooting up 11.9%, according to the Bureau of Labor Statistics. This gap is seen as an advantage for the restaurant industry.
Impacts the Restaurant Industry
As many people stayed close to home for the past year and a half, there’s been a common item on quarantine shopping lists: coffee. Just as it has with every other walk of life, the COVID-19 pandemic fundamentally changed how and where consumers drink their coffee. Some things, however, never change—for instance, a coffee lover’s dedication. Coffee consumption has soared to a two-decade high as Americans brew up new post-COVID routines, according to exclusive consumer polling released by the National Coffee Association (NCA). More than any other beverage including tap water, 66% of Americans now drink coffee every day, up by nearly 14% since January 2021. This is the largest increase since NCA began tracking data. The Spring 2022 National Coffee Data Trends (NCDT) report prepared by Dig Insights on behalf of the NCA found that Americans have increased coffee consumption away from home by 8% since January 2021. At home, coffee consumption remains above pre-pandemic levels as well. Some 84% of coffee drinkers report now having had coffee at home in the past day. Consumption of espresso-based beverages, typically prepared away from home, have shot up 30% since the start of the pandemic, signaling recovery from the COVID-19 pandemic and also indicating new growth. Specialty coffee consumption hit a five-year high. 43% of coffee drinkers chose specialty coffee in the past day, up 20% since January 2021. Cappuccinos and lattes are tied for America's most popular coffee beverage, followed closely by plain espresso and cafe mocha. 41% of coffee drinkers use a drip coffee maker, followed by single-cup systems (27%), cold brewing (9%) and espresso machines (8%). NCA President and CEO William "Bill" Murray commented: "Given decades of independent scientific evidence that coffee drinkers live longer than people who never drink coffee, it's fitting to see America's top beverage emerge from COVID-19 more popular than ever at home, on the go, in the office, and in coffee shops around the country. "
Food prices have risen dramatically over the last 18 months as restaurants continue to struggle during the pandemic. Most operators have probably raised prices once, if not two or three times, to keep up with these costs. And this, of course, trickles down to the consumer. All of this is particularly challenging for the independent restaurant owner and operator, whether they are running one or two locations or a small local chain. They just don’t have the resources or the purchasing muscle of the larger corporate chains. But…what they do have right now is an unprecedented level of consumer goodwill. In fact, as Lee Schulman, founder of Panacea Management Group Consulting puts it, “More of it than I have seen at any other point in my 30-plus-year career in restaurant operations. People will normally put up some resistance when prices increase, whether during their visit or simply by not coming back. But that is not what is happening.” Most customers today understand and are sympathetic to the problems that the smaller, independent restaurants are facing, and they appreciate the experience of dining out on a different level than they did two years ago. They read the news, and they see other restaurants closing their doors because of the pandemic. So this is a unique opportunity. If ever there was going to be a time when customers are forgiving of, and even expect, a rise in menu prices, this is that time! They want their local restaurants to succeed. This does not mean that a restaurant can just mark everything up 5%, 10%, 15% or more and call it a day. Customers need to know that the restaurant is doing all that it can to minimize the hit on their wallets without resorting to serving an inferior product! In this current climate, therefore, it’s essential that operators establish and maintain a good line of communication with their vendors so that they have a heads-up when prices are about to go up and can quickly source that alternative cut of meat or whatever is needed to avoid an interruption. It is far better to offer a slightly revised menu item than to have to apologize for not having a customer’s favorite. In short, what you do behind the scenes is just as important, if not more so, as whatever markups you end up adding to your menu. Customers are going to notice…and will continue to reward your efforts with their business.
On Friday, May 22, 2020 in response to the pandemic and public health restrictions, the City of Santa Barbara closed Downtown State Street to cars, opening the street to pedestrians, shoppers and outdoor dining so that residents could enjoy downtown's newly created open space. Likewise, across the country, state and local officials relaxed various rules and, suddenly, the hurdles to converting parking spaces into outdoor seating areas were low enough for many restaurateurs to clear. Over one year later, the State Street promenade is filled with foot traffic, and Santa Barbara Mayor Cathy Murillo says it has provided a much-needed spark downtown. Many believe that it shouldn’t have taken a pandemic to give Californians—or anyone else—the simple communal pleasure of dining outdoors. State Senator Weiner, however, believes that if a city had come forward before the pandemic and proposed the idea of “dramatically expanding outdoor dining, there would have been a lot of pushback. Like, ‘Whoa, what’s going to happen to the neighborhood? We need parking.’ However, this is not a mysterious unknown now. Not everybody likes it, but most people do…They love it!” It seems that if outdoor dining can flourish anywhere, surely it can do so in California—where the weather is temperate and a wildly diverse corps of chefs has year-round access to high-quality produce, seafood, and wine. Yet before the pandemic hit, the Golden State had long been outclassed in offering congenial surroundings for alfresco dining. Think of Paris and its famous sidewalk cafés. Even smaller cities in France, Spain, and Italy offer a higher density of pleasant outdoor seats than Los Angeles, population 3.9 million. It turns out that there is a reason…for decades, onerous regulations have deprived Californians of both the pleasure of eating outdoors and the convivial streetscapes that curbside dining creates. Now that the pandemic has shown us what’s possible, it’s a story that ought to end happily. Instead, in San Francisco and elsewhere in California, the red tape that prevented dining alfresco before the pandemic is starting to grow back. Paso Robles and Pismo Beach recently ended temporary programs, even as local officials professed to wanting more outdoor dining going forward. And, ironically, a survey of 130 mayors across the country by Boston University found that although many cities repurposed public spaces during the pandemic, few mayors intend to make the changes permanent.
Last year the holiday season was kept small and safe with Zoom dinners, mailed gifts, and virtual gatherings, but this year folks are expecting more time in-person with loved ones, slightly bigger guest lists, and a bit more of a social calendar. With all the cooking at home that’s gone on during the COVID-19 pandemic, dining out is starting to feel like a super special occasion again. In response, restaurant industry pros across the country are reporting that private dining rooms (known as PDRs) are booked up for November and December. The private dining room at NYC Italian mainstay L'Artusi received 1,742 inquiries in the past 30 days alone, according to owner Kevin Garry. "In the last four to six months, private events literally went from zero to 100," he says. "It's clear that the opportunity to reconnect with old friends and colleagues over a great meal is good for our collective soul." Previously, the PDR was a go-to option for corporate retreats and office holiday dinners; events typically fueled by expense accounts. "This year, we are seeing more requests for groups of friends or families. Most inquiries are for groups between 15 to 30 guests," explains William Bradley, chef and director of San Diego's Addison. Likewise, the private dining room at The Standard Grill has been booked constantly for months, says Marc Geller, director of marketing for The Standard, High Line. "The vibe recently has been very social, with a lot of brunches, lunches, and private dinners." Even freshly minted spots are being flooded with inquiries. "We've only been open a few short weeks and the number of inquiries for our private dining room or semi-private spaces is quickly approaching triple digits," says Felipe Donnelly, executive chef of Comodo, a new Latin American-inspired restaurant in New York City. Donnelly has nailed one of the core draws of the PDR experience in 2021: "Private dining rooms provide the restaurant experience without the full commitment of dining indoors with a lot of strangers. Many people are still hesitant to be in close proximity with people they don't know, but as the season change brings colder weather, outdoor dining is losing its appeal — and that's where private dining rooms come in." It makes sense, given that PDRs are effectively ideal COVID-friendly socialization pods. They offer the intimacy and peace of mind that comes from guaranteed vaccination status in establishments that mandate it, not to mention the ability to escape one's own living room (and the burden of doing dishes after everyone's gone home). Lilli Sherman, founder of brand marketing studio OMA, recently booked the PDR at Brooklyn's Rule of Thirds for her partner and best friend's joint birthday party. "I would say beyond the safety element, we all are craving more intimate, less overly stimulated experiences...dinners where we can actually hear each other and feel connected versus being in a large dining room with blaring music and drunk diners..." Sherman says the private bungalow feel of the PDR at Rule of Thirds made the experience truly memorable. Hospitality pros across the country are pleased to see other guests following suit. Felipe Donnelly, executive chef of Comodo in NYC is optimisitc: "If people are able to gather together and share a meal in a space they feel comfortable, it may just be the ticket to helping the restaurant industry swing back and thrive again."
Morning Consult, a global data intelligence company, has been tracking how safe Americans feel dining out at restaurants in light of the COVID-19 pandemic since the Spring of 2020. The restaurant industry was hit hard when states across the country first went into lockdowns and businesses had to rely solely on takeout and delivery to stay afloat. Restaurants have since been able to reopen their dining rooms to various degrees and, although it may take time for the industry to fully recover, consumers consistently report that the activity they miss the most is eating out. While tracking pent-up demand and excitement for various types of consumer activities, Morning Consult also found that the activity Americans felt most comfortable with was dining out. As of October 20, 2021, they report that key trends have emerged: 1. Steady Increases for Third Week Straight: 69% of U.S. adults said they feel comfortable going out to eat at a restaurant as of an Oct. 14-16 survey, an increase of 2 percentage points from last week and 2 points shy of tying a record high in comfort with the activity first reached on the Fourth of July. The share of adults who said they felt safe dining out didn’t change in September but has steadily increased in October. 2. Gap in Comfort With Indoor, Outdoor Dining Slightly Narrows: 74% of adults feel OK eating outdoors at a restaurant, compared to 65% who said they’re OK eating indoors. That’s a gap of 9 points, slightly smaller than the 11-point difference in opinion that emerged in August and has largely remained in place into early October. 3. Americans Are Ordering More Takeout, Delivery: Takeout remains the most popular option for ordering food, with 39% of consumers saying they order takeout at least once a week as of a mid-October survey, up 3 points from this time last month. The share who said they get food delivered that often also increased by the same amount over that time, from 25% to 28%. Dining in at restaurants is roughly as popular as ordering delivery, with 30% of U.S. adults saying they do so at least once a week. When will things return to normal, and what will our new normal look like? Those are questions that business, economic, and government leaders alike are grappling with as more and more Americans receive the COVID-19 vaccine. It is going to be challenging, but in an industry accustomed to facing a relentless array of obstacles, those in the know say definitively, “We’ll meet this one, too.”
