Restaurant owners throughout the country are struggling to keep their doors open during the COVID-19 pandemic. As states across the nation relinquish stay-at-home orders, customers are eager to get out of the house and return to their favorite hot spots.
But restaurant owners are facing a colossal decision: opening doors completely and risking infection, or remaining partially open for take-out and delivery services only. As we enter this uncharted territory, here is everything you need to know about the challenges restaurant owners are facing like never before.
Delivery App Fees
Along with the introduction of lockdown and social guidelines came the surging demand for food delivery services. As restaurants partially opened their doors for take-out only, many owners partnered up with delivery apps, such as UberEats, Postmates, Grub Hub and DoorDash. Struggling to meet demand through these services, restaurants were faced with another hurdle: delivery app fees.
Apps like UberEats and DoorDash collect anywhere between 25-35% of a delivery order. In an already thin profit margin industry, these fees are sucking restaurants dry. Some cities, such as San Francisco and NYC, have adopted commission caps on delivery fees until in-person dining resumes; but for the most part, the restaurant industry is facing the financial burdens of partnering with delivery companies.
The Supply Chain
Grocery store food prices are surging as a result of COVID-19. In April, grocery stores experienced their most drastic price increase in the past 50 years. Last month, meat, a leading product in the sharp price surge, accounted for a 3.3% price increase and grocery prices in general rose about 2.6%. As large food producers shut down their factories, they're also being forced to euthanize their livestock and throw away their crops. Meat producer employees in particular are becoming infected with COVID-19 because the plants don't allow for social distancing.
Buying in Bulk is Expensive
COVID-19 effects on the food supply chain are devastating. Food producers are experiencing an influx of incredible waste, and the same is true for many restaurants. As orders decrease, buying in bulk from wholesalers is becoming less financially feasible.
In a podcast released on May 15 by New York Times' The Daily, restaurant owner Jasmine Lombrage of Baton Rouge said she can no longer buy in bulk to support her business because she has significantly less customers during the pandemic. Lombrage said that buying smaller volumes from local grocery stores prevents waste, but further thins her profit margins. Many owners, like Lombrage, are operating at zero profit levels, keeping doors open while making close to nothing.
The Decision
The grim reality of the restaurant industry during COVID-19 is that many owners are facing the hardest decision yet: risking the health of their employees and customers to survive financially by opening for in-person dining or continuing to do take-out only but struggling to survive financially.
Many state guidelines surrounding COVID-19 only support between 25-50% capacity in restaurants that wish to reopen; but health and safety concerns still linger for many Americans. A recent poll suggests that only 26% of Americans support the reopening of restaurants for complete in-person dining. In a debate with no simple solution, the restaurant industry is struggling with a major dilemma.
Where Do We Go From Here?
With the current state of the restaurant industry, it's tough to imagine that many businesses will survive COVID-19. The short-term solution for customers wishing to support their favorite restaurants and local businesses is to order food from these establishments directly. Before ordering off of delivery apps, consider picking up your order from the restaurant itself.
Reach out to local and state representatives. Restaurant owner and creator of the Netflix documentary series "Ugly Delicious" David Chang said the restaurant industry needs government intervention in order for the service industry to exist in the future. In the economic downfall of the pandemic, stimulus loans aren't feasible for small restaurants and the business death rate is projected to be high.
Advocacy for greater bailout packages for real estate owners is crucial and can provide relief to restaurant owners. We are all struggling during this time of uncertainty, but in the meantime it's important to support our local restaurants, advocate for government intervention and fight for the establishments that add charm and flavor to our communities.