(UKTN Detroit) – The COVID pandemic has damaged the restaurant industry and other large segments of the economy over the past year. Initially, the rules put in place to fight the airborne virus forced establishments to close their doors for weeks in many parts of the country. Some have never reopened. Others reopened, with security measures in place, but could not survive given capacity limits. A heavy reliance on delivery and take out was simply not possible for restaurants with large dining areas. Yet many of those who were not oriented towards in-person service pivoted and survived in the starting environment.
The pandemic has also shed light on some of the fundamental flaws in the industry, especially when it comes to workers. “Some of the cultural issues, some of the pay issues, the labor issues that have simmered slowly to the surface for many years,” summarizes Lilly Jan, a food and beverage lecturer at Cornell’s School of Hotel Administration. it up.
READ MORE: Stimulus Check Update: Social Security Recipients Still Waiting May Receive Relief Payments Soon
One year after this initial shutdown, where are the restaurants and how are they progressing?
According to the latest State of the Restaurant Industry Report from the National Restaurant Association, industry sales fell $ 240 billion last year as 110,000 establishments closed temporarily or permanently and d others have seen their sales decline. Most of the restaurants closed were long-standing local establishments that had served their communities for more than a decade and a half on average. The industry also lost 2.5 million jobs during 2020. Staffing is down 20 percent for nearly two-thirds of gourmet restaurant operators and more than half of casual restaurant operators.
The catering establishments that have remained open have adapted to the far from ideal situation. Domestic capacity has been limited to 25 or 50 percent in many parts of the country, which is generally not enough to stay in business. Many restaurants have doubled deliveries and take out. Some have enlarged their dining room beyond their four walls, whatever outdoor space they have. (In big cities like New York and Boston, that could even mean adjacent parking spaces.) Others have rented additional kitchen space to separate delivery operations or additional space in the dining room, outside. opening hours, to workers needing a shared workspace. Many have resorted to a combination of these and other methods to stay afloat.
“The small restaurants that made up a big part of the community did better, because their community rallied around them,” Jan remarked. “Those who were engaged in a conversation with the communities did better. This is generally true. Those who were really in touch with social media, really in touch with customers, did better because it mobilized the community for support. “
“We know that virtually every restaurant in every community has been affected,” said Tom Bené, president and CEO of the National Restaurant Association. “In an ever-changing landscape of restaurant restrictions and widespread closures, restaurants have found ways to adapt, keep employees, and serve our customers safely.”
An economic rebound depends on the widespread release of a COVID vaccine. And the efforts to immunize the public are advancing day by day. Americans have received more than 150 million doses, with 29.4% of the population having received at least one dose and 16.4% fully vaccinated. The number of vaccines continues to increase at a rate well over 2 million doses per day. In a display of continued optimism, President Biden increased his vaccination goal from 100 million doses in the first 100 days of his presidency to 200 million doses.
READ MORE: Why are there no houses to buy?
Restaurants have been hit as hard as any industry and have a long way to go back to normal – or a new normal. Even as cities and states relax their restrictions, consumers remain wary of public spaces. And the guests are still hesitant to go back to eat inside. There is a strong pent-up demand. But restaurants can’t just open their doors and expect audiences to come back in droves. There must be a method to madness.
“First and foremost, you have to know your customers,” Jan said. “Some customers may be placing more emphasis on security procedures and social distance between tables and minimal contact time with their servers. Other places might be more tech-focused and want some of it. Or other places might be just fine with a full dining experience in person. I think knowing your audience is number one. “
But it doesn’t stop there. “Number two is finding a menu and service operation that work and are financially sustainable,” Jan continued. “So maybe you don’t offer the full menu that you had before because you just can’t afford the overhead on inventory and all that stuff. But maybe you want to offer a smaller, tighter menu at slightly higher prices because you are offering a different quality or a different portion size or something like that. And you’re really tweaking this menu to maximize your sales in this area. Thinking smart about your offers and the trade-offs between overhead and revenue is therefore the second thing. “
Sticking with delivery and take out as the main source of income usually won’t be an option. According to Jan, “Why would you have a facade that you pay rent on, that you can’t sell?” Every square foot of a restaurant counts. It has to generate money, which is often why the front of the house looks great and is more spacious and the kitchens are much more cramped, because we want to make this floor space as functional as possible to compensate for all the other elements. So I don’t imagine that restaurants that have a food court and were in person before the pandemic will be left with just take out. “
“I think a lot of restaurants, having seen that they can do take out and that it can be a great source of income, will continue to do so,” Jan said. “This multichannel revenue stream is always useful. But I don’t imagine that there will be many restaurants that were in operation before, it will only be to go. “
Ultimately, restaurants depend on volume for sales. And for the foreseeable future, that volume will depend on local capacity restrictions and the public’s willingness to eat in a crowded environment. Jan is therefore not sure that restaurants will experience a huge spike in activity. “I think there will be an initial increase in the rate. All that pent-up desire to go out to dinner and enjoy restaurant meals again, we’ll definitely see a little spike. But I don’t think it will return to where it was before the pandemic. I think he will slowly come back to where we were.
When it comes to availability i.e. chain restaurants as opposed to local establishments, there is still plenty of room for both. Each responds to a different consumer need. Big chains offer a certain level of convenience and consistency that people are looking for. Local restaurants are part of the community people are attached to and come together.
NO MORE NEWS: Child tax credit: ‘IRS is not currently set up to provide regular monthly payments,’ says expert
According to Jan, “Consumers’ interests are pretty much always shared along the same lines, before the pandemic and now. But it’s really hard to say that consumers are very budget conscious and also really need comfort, familiarity, and security. They may be leaning towards big companies and big chains. But, also, I think this year has been spent a lot of thinking inside and seeing who can I support and what my community is like. How can I help small businesses and places that need this support? I think a lot of people will double down on this as well. So I think at the end of the day the numbers will stay the same. “