Restaurants and bars were the last undisruptable business. The simple act of eating or getting drinks with friends forced even the most indoors and weird among us onto at least one avenue of genuine connection with our local communities. Now, with stay-at-home orders in effect over much of the country, they’re in trouble.
A recent James Beard Foundation survey of chefs, restaurateurs, beverage professionals, and workers found that 60% won’t be able to sustain closure for one full month. 75% said they wouldn’t be able to reopen after two months. Many are trying to scrape by on take out and delivery orders, but the survey, released in mid-March, showed that 78% of hourly workers and 58% of salaried had already been let go.
The $2 trillion stimulus package that recently its way through Congress includes $370 billion in loans for small businesses through the Small Business Administration (some of which don’t have to be paid back) but it’s still unclear how much that will help bars and restaurants, or whether they can stay afloat until the bill would go into effect. The New York Times reports that “the S.B.A.’s website has been so jammed that many users have been unable to complete loan applications, and those who did are told that they will take at least three weeks to process.”
Even assuming that money does fill some holes, there are other types of revenue bars and restaurants count on that you just can’t bring back.
“I think one of the sad things is, if a concert or a party or something was canceled, that’s something that you never get back. If you’re a Toyota dealership and you have to close for six months, you know people’s cars are still falling apart and they need a new car. But when it comes to entertainment purchases or travel, that’s forever lost,” says Jim Woods, owner of a chain of small brew pubs in San Francisco and Oakland. “I think people are going to recover and they’re going to get scrappy, but that’s already a massive amount of wealth that has been lost by this industry that they’re never going to get back. ”
Profit margins with restaurants are already so thin that any little thing can affect them, and the COVID quarantine brings with it a kaleidoscope of secondary consequences. It’s odd that in the most elemental of business models — feeding people — viability is so tenuous.
“Right now, when I’m quarantining at home myself, I’m trying to order from places that I want to support as much as possible,” says Jim Van Blaricum, owner of Bernadette’s Bar and Buddy’s restaurant in downtown LA. “There’s a bar/restaurant that’s downstairs in our building, but I live two blocks away from Staples Center, and so this bar, three weeks ago when the NBA shut down, they were already starting to feel the pinch. Because so much of their business comes from people going to and from events at Staples and the Convention Center and now all that’s gone.”
Likewise, Van Blaricum runs his own bar and restaurant from a neighborhood that once seemed promising, but amidst a shelter-in-place order might be more of a liability.
“There aren’t a ton of people that live down here yet,” says Van Blaricum, whose bar and restaurant are about a block from Pershing Square and a few doors down from the recently gentrified Grand Central Market. “We basically built a neighborhood bar in an area where there is not yet a neighborhood. A lot of our food is aimed at a late night bar crowd, and that’s obviously completely evaporated.”
These are the kinds of neighborhoods, the ones not yet established but with potential, where young bar and restaurant owners set up shop. It’s not difficult to imagine them being the hardest hit, and if they fail, to imagine the effect on the neighborhoods that they put so much effort into revitalizing.
Virtually every restaurant owner I spoke to had had to let go of staff. For most, that means laying off hourly workers to make them eligible for unemployment, in the hopes of being able to eventually rehire them. The stimulus plan mandates up to a $600 per week across-the-board increase in unemployment benefits, but unemployment is based on reported income, which, as anyone who’s ever had a tip job can attest, tend to be underreported by anyone whose income comes mostly from tips.
“We had right under 50 employees and we laid off about 40 of them, and then we have 10 salaried members of our staff that we’re trying to keep employed,” says Kristen Essig, co-owner of Coquette and Thalia, an established fine dining restaurant and a new neighborhood spot, respectively, in New Orleans.
The numbers vary among the restaurateurs and bar owners I spoke to, based on so many factors it’s hard to account for — whether the restaurant can easily pivot to takeout, how loyal a fanbase they have, the rent on the space, what other things they can sell, etc.
“As a Chinese restaurant, I think we got lucky because when people are aware that restaurants are only doing carryout orders, Chinese food is probably one of the first things that comes to mind,” Richard Horner, a partner in the Chinese-American New Orleans concept, Blue Giant, told me. “Some of my friends in fine dining have implemented these curbside pickups or whatever and have seen a much bigger percentage drop in sales just because I think people aren’t thinking about the fine dining restaurants as a carryout option.”
“I’m selling gift cards just to try to get some money coming into the bar, and I’m selling merch, like sweatshirts, shirts, pint glasses and stuff,” says Van Blaricum. “All of that money, I’m not even keeping cost on it, I’m just passing all of it to the employees directly, just so they have some amount of income coming in.”
“Gift cards are like a no-interest loan to your favorite bars and restaurants,” Woods says.
So it seems with just about everything, smaller operations seem to be harder hit. I spoke to Clint Melville, who has run Rip City Grill, a tri tip cart, from the same location in Portland, Oregon for 13 years, who told me “I just said goodbye to one of my employees. I’m not really sure when I will see him again, but I told him if he needed cash to hit me up.”
Rip City Grill had expanded into a mobile food truck business serving local offices and a catering business, both of which are now on hold indefinitely.
Meanwhile, a similar large-small dynamic may be playing out among the purveyors supplying those restaurants — the stay-at-home requirements may be a blip for supermarkets, but a disaster for smaller, more specialized farmers that sell to fine dining restaurants.
“I don’t know how long they’re going to be picking vegetables, I don’t know how long they’re going to be slaughtering pigs, all of these are jobs that require people to do them,” Essig says. “Trying to keep that supply chain going is so important because of that. As soon as people stop buying en masse, people start losing their jobs in other areas. We’ve already had just our reps for distributors are starting to lose their jobs because they don’t need 20 reps for the 25 restaurants or whatever’s open in New Orleans.”
If there’s a silver lining, it’s that people are suddenly aware of workers that may once have been taken for granted, and they’re strengthening their communities out of necessity.
“We have turned Thalia into a community kitchen where we’re trying to feed as many industry people as possible, helping them with family meals, and then continuing to provide our laid-off employees with family meals as well so that we are at least still working through,” says Essig. “We’re doing some work with a really fantastic organization called the Red Beans Parade. They started out as a Mardi Gras group, but they do a lot of philanthropic work throughout the community. My friend Devin DeWulf runs it and he has been gathering donations from the public to support paying restaurants for meals that we are sending to hospital and emergency workers. We’re doing those hospital meals and the staff meals out of Thalia and then we’re doing our general public pickup of to-go food from Coquette.”
There’s a similar effort underway in LA, and other restaurants have been trying to use the facilities to feed all the laid-off industry service staff.
Family meal to those in need is top priority. We need a minute to get caught up. Regular delivery and curbside pick up after those in need are fed today. Thanks for y’alls patience. https://t.co/6v2yDeoxVU
— Chef Isaac Toups (@IsaacToups) March 29, 2020
It’s unclear how long restaurants will be able to do it, but it’s nice to see community step in where government is still absent. Whereas the stock market is so often held up as the benchmark of economic health, for most of us in the non-shareholding class, losing a paycheck or a favorite local haunt is the more immediate hardship. Consumer choice can only ever get us so far, of course, but almost all the restaurant owners I spoke to say there are things you can do to help restaurants and their employees through the rough patch.
“I think one of the biggest things that you can do is that there are a lot of restaurants that are using their social media platforms to call for federal action. We have a lot of action, but how that money is going to be distributed amongst all of the different industries — it’s great that the aviation industry is going to get $50 billion or whatever. What’s the small restaurant with under 50 employees, what am I going to get?” Essig says.
“Then also, just see who’s doing the work, see who’s contributing. If you don’t know how to help a local restaurant that you’re a fan of, call them,” Essig says. “They are literally sitting in their restaurants trying to figure something out.”
“We’re all just sitting here. It’s like being in detention,” Horner says. “I’m just happy to talk to a new person. We are genuinely appreciative of every single person who’s come through and bought food right now.”
“I’ve seen some Instagram things where people are tagging restaurants that they like,” Van Blaricum says. “I think honestly, probably the best way is if there’s a place that you like, look on the website, check their Instagram or Facebook or Twitter or whatever, and see if you can figure out what hours they still have and how you can order from them.”
There was a lot the government could have done to help an industry that’s an integral part of so many of our daily lives, from offering healthcare to furloughed workers to rent and utility freezes for restaurant owners, or simply stepping in to pay workers salaries as in Denmark, rather than giving the biggest chunk of money to banks. But in the absence of that, it seems “call your congressman” and “vote with your dollar” are about the best that we’ve got.
“The scariest part of all of this is just the uncertainty,” Van Blaricum says. “If there were a single event that just had obvious repercussions that you could quantify right now, and go, ‘Okay, we’re closed for two weeks, that’s X-amount of dollars, and so we need to take out this loan or ask for this amount of deferral or whatever,’ it would be a lot easier to handle. I’m obviously going to try to get the landlord again to do some kind of abatement, but are we talking about a one-month abatement? Or is it going to be a thing where we’re asking for three months?”