Photo: RetailWire
Winter cold kills last remaining option for many restaurants
The National Restaurant Association (NRA) recently said the restaurant industry has likely fallen into a double dip recession. In November, eating and drinking place sales were down 4 percent from October and were 19 percent below pre-coronavirus levels in January and February.
The deteriorating business condition was blamed on the end of the outdoor dining season in many parts of the country.
A separate NRA survey of restaurant operators taken from November 17 to 30 found:
- Fifty-two percent of full-service operators offered on-premises outdoor dining in a space such as a patio, deck or sidewalk, down from 74 percent in early September;
- Forty-six percent of limited-service operators offered outdoor dining, down from 60 percent in September;
- Eighty-three percent of full-service operators and 67 percent of limited-service operators expect their sales to decline from current levels over the next three months.
Billy Cole, the general manager of Little Dokebi, a Korean restaurant in Brooklyn, told USA Today, “What’s a heater gonna do when it’s 30 degrees out and you’re 50 percent exposed anyway?”
Sadiya Khan, an epidemiologist at Northwestern University’s Feiberg School of Medicine, told USA Today she worries “outdoor” structures are really turned into indoor facilities, with the addition of heating, carpeting and being closed off to the open air. Some cities require temporary outdoor structures to have open air sides, a challenge when cold.
Prof. Khan noted that the virus from a previous customer could remain in an outdoor restaurant structure after the diner has left. In New York City, tables and chairs had to be moved inside with the recent snowstorm, at nearly the same time as they were facing an indoor dining ban from the state. Changing governmental restrictions are also a source of frustration for restaurant and bar operators.
Speaking to CNN, chef and author Edward Lee Edward Lee expressed concerns that the higher operating expenses of outdoor dining and rising food costs along the sales shortfalls would lead to a loss of independent restaurant culture. He said, “We will become a nation of corporate chain restaurants that will look and taste the same in every city.”
- Restaurant sales fell for the second consecutive month – National Restaurant Association
- COVID-19 Restaurant Impact Survey – National Restaurant Association
- ‘What’s a heater gonna do when it’s 30 degrees’: Restaurants face bleak winter during COVID-19 – USA Today
- The restaurant apocalypse is here – CNN
- The Lee Initiative
- Restaurant Closings Top 110,000 With Industry in ‘Free Fall’ – Bloomberg
Discussion Questions
DISCUSSION QUESTIONS: Do you have any creative ideas for struggling restaurants trying to survive the winter of 2020-21? Do you feel the industry will bounce back quickly once the pandemic ends, or do you see a big change in the landscape coming?
Poll
BrainTrust
Neil Saunders
Managing Director, GlobalData
Rich Kizer
Principal, KIZER & BENDER Speaking
Where I live in Arizona, outdoor eating can occur all year round. In fact, it is nicer in the winter when the temperatures are cooler than it is in the blisteringly hot summer months. Sadly, this is not the case in other areas of the country, and restaurants there are suffering. Offering takeout for in-home dining is one option, but it is not the perfect solution and doesn’t replace all of the lost demand. Honestly, if states force restaurants to close down then they need to provide compensation and relief. That’s the only real way through this for many outlets.
Beyond takeout and home delivery, the options for restaurants aren’t great. There might be some different ideas around delivery or creating home experiences that would be interesting, but by and large it is a difficult challenge for this segment. I do think we’ll see a quick rebound for these businesses once the pandemic is over, the question is who will still be standing when that time comes. I strongly support the efforts by governments to support these business through this. Being able to go back to some of our favorite eateries will be a highlight of the recovery I’m sure.
Trying to be optimistic, I see a gradual rebound as the weather improves (allowing for a return to outdoor dining) and as more vaccinated customers feel secure about eating out. (This goes for other venues too, from movie theatres to shopping centers.) In the short term, restaurants in colder parts of the country will need to adapt to survive — they have had most of 2020 to figure out delivery or curbside options, and they should have seen this coming. A fully enclosed “igloo” on a sidewalk isn’t really a safe alternative these days.
I live in Florida. Cold weather is only a problem a few weeks a year. But that does not solve the restaurant/food industry problem. I have not read the new relief bill (who has) but leaving this industry out is something I do not understand. Are we seeing the beginning of the end of the popular local restaurants we always enjoyed visiting?
What some restaurateurs have done with outside dining I personally find highly unacceptable. They have enclosed their structures to the point that you might as well be inside. I will not go to those restaurants.
Others have approached it much more creatively, essentially isolating each table from the next with partitions and leaving a full side open. Others have provided airflow below and above the tables.
The winter will be difficult for restaurants. In NYC and in various other cities and states, indoor dining has closed as data has shown that it creates hot spots. The weather will affect outdoor dining. Hopefully we have a mild winter. Certainly the below freezing weather essentially eliminates outdoor dinning, but it doesn’t take many additional degrees for diners to bundle up and still enjoy the outdoors.
My prediction is that the industry will bounce back when the weather bounces back. In NYC the restaurants had been taking full advantage of outdoor dining. For many it had in fact expanded their business capacity. So bring on the good weather and watch outdoor dining become the norm in the good weather months, even after the pandemic.
I wish I felt as optimistic, Gene. I’ve read reports that many restaurants are making the decision to close down completely for the winter here in NYC. Some are getting discounts from their landlords, but it’s hard to imagine the majority of them having the funds left to reopen. There are many inspiring examples of restaurants adding on “larder” shops, distributing CSA farm goods, bottling up their cocktails for take-home consumption and getting creative in other ways. One thing is certain: the survivors will be the strong ones.
It such a sad sight to see, Rick, especially as the restaurant community is such a vital part of what makes NYC such a unique place to live and travel.
Creativity, resilience, and flexibility only will get them so far without the continued influx of recurring revenue from restaurant customers. I am afraid that when spring begins we may have only a fraction of the restaurants we have now, and the majority of them will be larger chains.
I am certainly not a restaurant maven. But what keeps me up at night is how restaurants, which face demands for constant cleanliness (think of the frequent visits from the health inspector they receive), can be more harmful than other businesses that consumers can easily visit frequently. If the government says no, it’s no — but I think it would be wonderful if the government could create a serious bailout for these poor business folks who seem to be tagged as a “danger.”
If independent restaurants are to survive on outdoor dining and takeout/delivery services, they will go through a very rough winter in many parts of the country without any government-supported relief. Unfortunately, there isn’t much they can do apart from trying hard to promote their takeout and delivery options for the season if they can’t provide outdoor dining. The issue of course with government support is that larger, national, and regional brands will try to take some of that support which reduces what’s available for independents. Any such support needs to focus on those independent restaurants much more so than any of the national brands who can weather the season much more effectively than independent owners. Where this gets tricky is with smaller franchise owners of those national brands. Where will they turn to for help?
The NYC restaurant industry has been the story of resiliency, adaptability, flexibility, and, most of all, courage in the face of a global pandemic. However in NYC and the surrounding tri-state area, they face a larger crisis than in warmer climates such as Arizona, Florida, and California.
It is so commendable and wonderful to see how NYC residents have supported their local restaurants throughout the year and now until the winter. Many restaurants have also done a solid job of shifting their operating model to takeout, delivery, and curbside pickup strategies. However with outdoor dining options diminishing with the falling snow and wind chill factors, delivery will not make up for the 50 percent to 75 percent volume shortfalls.
Without federally or state-mandated support and subsidies, in NYC and other northeast cities independently owned restaurants will be hard-pressed to survive the winter months.
I would omit California from your list. 1) even outdoor dining is currently prohibited here thru some time in January … at least, and 2) the weather right now — in the Bay Area — is mornings in the 40s, highs in the 50s with a nice stiff breeze often blowing thru and of course darkness descending by 5ish (bringing on the cold of night). It’s hardly conductive to outdoor service, even with auxiliary equipment. The only upshot is currently we’re in a drought, so rain is minimized, but who wants to wish for that to continue?
Beyond heaters and blankets, what do you do? Get creative. I’ve seen restaurants doing car service, just like the old days. A tray on the window and guests enjoy their meals in the comfort of their own cars. Consider going online. There are plenty of services (like Goldbelly) that could partner with the restaurant. What about turning the restaurant into a market that gives away the recipes and sells the ingredients to make some of the more popular dishes?
Restaurants must do anything they can to survive the next few months. Once the pandemic ends and it is safe, people will come. Guests are craving the opportunity to get back to their favorite places to enjoy meals with their families, friends and business colleagues.
Bounce back? Are people still talking about this fantasy? As I noted back in (I think) April, you can’t bounce back if you go out of business first.
I don’t have any creative ideas. I don’t think anyone does, other than the “muddles thru” of takeout/delivery, which is probably OK for a small sliver, survivable for others, and no help at all for practically all full service/high price establishments.
Government aid seems to be, if not a panacea, then at least a necessity, for many of the respondents, but the common complaint that “people in government don’t really understand how businesses work” seems to be manifesting itself here. The only progress I’ve seen is that no one is suggesting a tax cut as a remedy (or if they are, they’re being ignored).
At the outset, permit me to echo the sentiment expressed by others, that the only viable short term solution is providing financial assistance to the owners and employees of restaurants.
One interesting approach was highlighted in Food & Wine: “Pantry Goods Take Center Stage at Restaurants This Winter.” In this article, highlighted by Kevin Coupe, “traditional and new restaurants are creating a new model less focused on indoor dining, but also offering a more robust take-out menu and a more curated grocery selection that is keyed to their ethos and value proposition.”
There’s even a name for this concept: restaurmarkets, a unique approach to stay relevant and perhaps stay in business.