The restaurant industry in the post-COVID world
I cried today for the first time since the word coronavirus became part of my vocabulary.
After a pretty hellish April (virus aside, the weather was like a prewritten suicide note) the sun came out this weekend and brought the warm weather with it. It was time to get out; yesterday to Central Park to see people, plants and picnics (albeit socially distanced), all signs of spring and hope. Today was a bit different. I took a 125 block sojourn into different neighborhoods and side streets across the city.
The drug and grocery stores had their usual waiting lines. Other stores were dark with hastily written notes of closure taped to the door, almost like someone yelled, “fire,” and everyone grabbed their insurance policies and ran. Lots of restaurants were open for takeout and delivery, with signs that read more like warnings than welcomes. Stay back! Must be 6’ apart! In a bit of a brutal reality check, many had their lights turned off in an effort to save money. A few restaurants have turned tables into outdoor bars, drawing small crowds trying to enjoy something that resembled a normal Sunday afternoon.
I passed a small Italian restaurant that was dark. I peeked in the window hoping to see the owner scurrying about bagging up to-go orders. No such luck. Just six tables covered in white tablecloths. No sign. No “takeout coming soon.” Somebody’s future was locked inside this little space that relied on filling just six tables regularly. And I cried.
It was selfish at first. This was just one more neighborhood gem I wouldn’t get to try. And then, of course, it was about an owner’s dream. Maybe it was a generations-old “go to” with neighborhood fans. Or maybe it belonged to a young chef who finally scraped together enough money to open her own place. Either way, you know they are hurting. As was I.
I work with these small restaurant owners all over the country and I know how tough the business is on a good day! But last week Lacy Beasley, president of Retail Strategies, challenged our brainstorming group to opine on who they thought might be the winners and losers in our post-COVID economy. I gave the question a lot of thought and in my heart, despite a really difficult time, I truly believe the winners will be independent restaurants. Here’s why:
First, in the initial stage of the crisis, restaurants were the only businesses allowed to open. Restaurants were the bridge between an isolated country and food! The smart ones were nimble enough to go from take out to family meals to grocery stores in a heartbeat! Amazing!
As the next weeks and months go by, there will be a tsunami of closings. And that’s not necessarily a bad thing. In the Great Recession, landlords filled space with restaurant after restaurant, deeming them “internet proof” and now, there are simply too many places to eat! And certainly way too many poorly operated, irrelevant, mediocre concepts occupying spaces too large and unwieldy for even the best operators. So whether they run out of cash or run out of steam (pandemics are exhausting!), owners will lock the doors. As a result, there will be less competition and more money to be made by those that have the staying power. Possibly a lot more money depending on when people decide it's safe to dine out.
At that point, it would be easy to declare victory and celebrate the winners. However, In the long term, independent restaurants have the perfect opportunity to make a decision: they can continue working 100 hour weeks, struggling to find quality help, paying rent that doesn’t support the concept and work on the narrowest of profit margins (average 3-5 percent). Or they can leverage this situation into an overhaul of an industry that’s just not working.
While we all entertain ourselves with the newly popular (re) words: rebuild, reset, reboot, recalibrate, it’s time to rethink the independent restaurant industry. Let’s get the owners (retail and restaurant) together to find ways to charge fair prices and refashion the industry to make fair profits and still give the consumer exactly what they want – great food and great experiences.
The model is broken and that’s okay. This is the perfect time to change it.
On another lighter and optimistic note, the ubiquitous tulip beds seen on almost every block in the city are bigger and more beautiful than ever. Almost like they received a shot of nuclear steroids. Perhaps the result of less pollution?