By the end of the month, most of the states across the country will finally lift lockdown restrictions on restaurants and reopen for in-person dining in a limited capacity in some form. But due to the need to rehire staff, stock supplies, and extend staff hours to keep up with new and potentially costly sanitization standards, many restaurants simply won’t be able to stay afloat, especially after several months of losses on the books. According to Bloomberg, a recent industry forecast by OpenTable indicates that one in every four U.S. restaurants will go out of business as a result of the coronavirus quarantines, even after lockdowns have been lifted.
Restaurants that are part of the National Restaurant Association estimated a total loss of $30 billion in sales in the month of March alone and a loss of $50 million for the month of April. With only 75% of restaurants expected to weather the upcoming storm, expect your favorite local restaurants and small businesses to be hit the hardest. Conglomerates will have a financial firewall to protect them; one-off restaurants won’t.
The study by OpenTable surveyed 20,000 restaurants operating in OpenTable’s network in order to get a clear picture of the challenges that restaurants face countrywide as they reopen. It compared data from the 2019’s number of reservations to help explain just how dire the situation is. Despite being open for take-out, businesses are reporting a drastic drop in receipts, with recent reports from reopened states showing a decline of just over 70% compared to the year prior.
In an effort to offer some aid, OpenTable is providing resources to help restaurants navigate the reopening process and manage confusing new regulations (all of which are being implemented on a state-by-state basis). Gift card fees are also temporarily being waived so that restaurants can see greater profits. (It should be noted that while this shows some good faith on the part of OpenTable, their business model revolves around restaurant reservations and they have a vested interest in restaurants being able to open as quickly as possible.)
The resources offered by OpenTable include tools to set up online waitlists and systems for customers to be notified when their table is ready to avoid crowding, as well as an interactive app that will allow restaurants to visualize new social-distancing-accommodating floor plans and table layouts. But for the most part, the resources offered essentially amount to common sense advice like “spread the word on social media,” or tips for keeping work areas clean.
Unfortunately, the wave of damage to the restaurant industry is moving rapidly. Just last week, David Chang announced the permanent closure of two restaurants, Momofuku DC and Momofuko Nishi, explaining on his Instagram, “When we looked at the investments needed to make our restaurants the safest places to dine and work — new systems and personal protective equipment for our teams — it became clear that not all our restaurants would be able to bear those costs.”
According to Eater, where they recently asked “Is It Safe To Eat At Restaurants Yet?”, those costs will likely include diminished capacity, expenses connected to contact tracing, automation of certain parts of the user experience (to create a more “touch-free” experience, and rigorous cleaning efforts. For restaurants, operating on famously thin margins, that’s a lot to bear.
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to our momofuku friends and family, we wanted to share the sad news that we are not reopening @momofukudc and momofuku nishi. we are also moving momofuku ssäm bar to the wayō space at south street seaport and combining those teams. we are so grateful to everyone that made ccdc and nishi what they were. ccdc was dave’s hometown restaurant, and at nishi, we learned how to face extremely difficult challenges together. the lessons and memories from these restaurants will always be a part of momofuku. these teams will continue to be supported by the momofuku bluetape fund through this crisis, and momofuku is committed to paying the costs of cobra medical insurance coverage. as we navigate this crisis, safety is our guiding principle. when we looked at the investments needed to make our restaurants the safest places to dine and work—new systems and personal protective equipment for our teams—it became clear that not all our restaurants would be able to bear those costs. we do not have all the answers, but our belief in the scrappy, passionate, hard-working people in our industry remains unchanged. link in bio to read the full note from our ceo @mzmariscal on this decision and the future of momofuku.
Mind you, David Chang has a Netflix show and is a seven-time Beard Award winner. If he’s closing properties, it speaks volumes of the difficulties independent businesses will face coming out of the shutdown. If ever there was a time to order takeout and buy gift cards from the restaurants you love, this is it.