Gary here. Thanks for stopping by.
We’ve heard the bad news resulting from the pandemic which has forced restaurants to lay off their staff and to close their doors, many forever. I cannot forget the heartbreaking story (New York Times, April 23rd) of Gabrielle Hamilton, owner and chef of NYC restaurant, Prune, and author of the memoir Blood, Bones, and Butter. In the NYT article title, she asked: My Restaurant Was My Life for 20 Years. Does the World Need It Anymore? This is a question that countless business owners are asking themselves, as they watch their dreams collapse.
The Wreckage
The San Francisco local ABC news channel reported (April 26th) that maybe half of San Francisco restaurants might be expected to close due to the pandemic. Their tag line was “Dining out in the Bay Area will likely never be the same.”
Since before Anthony Bourdain’s Kitchen Confidential, we’ve glorified chefs, leading to the spate of cooking shows on TV. That celebrity status hid the hard realities of the restaurant business. Gabrielle Hamilton said, “But the very first time you cut a payroll check, you understand quite bluntly that, poetic notions aside, you are running a business.”
That business relies on a constant flow of customers. The black swan of coronavirus destroyed our common notions, with restaurants sitting in the wrong seat at the table. Not now just an open table, but an empty table and café.
Let’s not forget the effect of the closings and layoffs on the restaurant staff, many from the most vulnerable parts of our community. It’s not just about us eating a nice meal. Now it is about them eating. I will not make light of the real suffering caused by the collapse of one entire sector of our economy.
The Resilience
But the picture is not apocalyptic. There is hope. There is resilience.
Open Table, the popular booking app, reported bookings falling to near zero in April. But a rebound to around 20% of previous levels was reported by the beginning of June. And that information is separate from the takeout business, which is the center of restaurant self-reliance and resilience in this pandemic. It is about these owners and staff figuring out how to survive in the perfect storm.
I see it in the astonishing turnaround among local restaurants. They cannot yet safely open their doors to anywhere near the numbers of customers as before. They are acting responsibly, working hard to figure out ways to still serve this basic human need, eating.
These restaurants should be applauded for their astonishing creativity and grit. Within weeks they have installed new equipment and set up facilities to allow social distancing for a limited number of customers. They have figured out how to turn their business model on its head, to serve take-out meals. Many pared down their menus so they can work for take-out orders. They added comfort food options, which we crave in these times. They figured out how to put the new menus onto websites, with new ways to pay. Many have a table by the door or at curbside, with a way to pay if something goes wrong online. The payment machine is sanitized, so that contactless pickup can work.
In my neighborhood, restaurants are finding creative ways to get their food to customers. There is Pearl on California Street, an innovative place known for their fabulous food, embracing curbside take-out. Four blocks away is Lokma, with their modern Turkish food, taking advantage of food delivery services. And Pizzetta 211 is doing a nice business for their fine pizzas first with well-organized curbside pickup and now, outside socially distanced dining. We are here to support those folks working like crazy to do what they do best. We want them to survive.
Those are a few anecdotal data points, too few to draw strong conclusions, but they show how restaurants have quickly pivoted their business model to survive.
The Future
We can be sure that sometime (likely I think in 2021) COVID-19 will no longer be with us. A vaccine will be developed, and we will be back to a “new normal.” What might that look like? What specifically will that be like for restaurants?
Researchers at Cornell University and Michigan State University conducted a study of restaurants in three local markets over a 10-year period. They found statistical evidence for restaurant failure rates (data per Restaurantowner.com).
| At End of: | Year 1 | Year 3 | Year 5 | Year 10 |
| Cumulative failure rate | 27% | 50% | 60% | 70% |
The conclusion is that failure rates are not as high as commonly believed (i.e., “most restaurants fail immediately”). But, since there are roughly 1 million restaurants in the US, there obviously is a high churn rate. Restaurants come and go.
What might we tentatively conclude from this armchair analysis?
Restaurants will fail at high rates this year, obviously higher than typical. Owners will not have the revenues to make payroll, and many won’t reopen. That could reduce the total number of restaurants by (just my guess) 15–25% after COVID-19 is behind us.
Our dining-out experience will change in the short term. There will be fewer restaurants, fewer choices, and it will take time for those surviving to regain their footing. We will think back sadly to those places we enjoyed pre-pandemic and will mourn for their loss. But there are so many chefs who have a passion for creating great food, and most will eventually open new restaurants once the economy recovers.
Perhaps there will be more meals shared at home around the family table—our practice at this from the pandemic carrying over to a small shift in habit. Does that affect more than a handful of meals per month? Think through your own habits and ask yourself how much you will change if given the choice. I’d guess not more than 15 – 25%. That suggests that “half the restaurants failing” is not the post-pandemic answer. Therefore, you can see the logic of my guess that the United States is not going back to a Leave it to Beaver idealized family (circa late 1950s) with the family gathered around the table every evening.
The overall conclusion is that café culture will be alive and well. We will not stop enjoying the human interaction and joy of eating out. We won’t change our basic human nature, with its fundamental social impetus.
That is my guess. And that is my process for trying to understand our future. Let’s be logical and back our theses with real information.
Now what do you think, and what is your evidence?