Even though people are slowly starting to eat out again as cities and states push to reopen their COVID-19-stricken economies, anyone expecting restaurants to immediately return to normal will be very disappointed. New data show that American restaurants are in for a long rehabilitation, one that might take more than a year — for the restaurants that even survive the coming months — as fear and uncertainty prevent restaurants, their workers, and diners from regaining any sense of normalcy.
Restaurant owners are hesitant to open
An Eater survey of more than 330 restaurant owners showed that many restaurants don’t expect to be fully operational during the first few months of reopening. More than 90 percent of owners surveyed say their establishments are currently closed or offering severely reduced services, with nearly 65 percent saying they believe it will take three months to a year before they can return to normal operations.
Source: Eater survey of 335 restaurant owners across the country, asking “how soon do you think your restaurant/food business can return to normal operations?”
The more upbeat news is that most owners say they hope to be open in some capacity in the next six weeks: Among currently shuttered restaurants, 85 percent plan to be open in some form by then — if not completely, then with reduced service or takeout options.
A key issue is money. While people are returning to restaurants in cities and states that have reopened, Toast, the restaurant point-of-sale system, found that revenue in those areas is only up about 20 to 30 percentage points compared to a month ago — far below normal revenue compared to last year, and not nearly enough to cover the losses of the last two months.
Without aid, this continued loss could mean a slew of permanent closures. In late March Congress approved the $349 billion Paycheck Protection Program (PPP) to help sustain small businesses via loans. After Americans realized that large corporations used loopholes to gobble up most of the PPP funds, Congress added $320 billion more to the pot. Eater’s survey found that 74 percent of restaurant owners that applied for PPP loans were approved through the second round (even though many are afraid to spend the money due to unclear forgiveness guidelines).
Restaurant advocates argue that’s not nearly enough. The Independent Restaurant Coalition, the trade advocacy group led by Tom Colicchio, Naomi Pomeroy, et al, claims PPP funds will only cover eight weeks of operations and that more money is needed if restaurants are expected to survive any reopening period. “The PPP remains an eight week band-aid for an 18-month problem overwhelming independent restaurants,” the Independent Restaurant Coalition wrote in a statement as the U.S. House of Representative considered changes to the Paycheck Protection Program. “They will incur new expenses for necessities like protective items and heightened cleaning protocols, while modifying dining rooms to reduce seating will cause independent restaurants to lose up to 50 percent in revenue if they are able to reopen at all.”
Customers are hesitant to dine-in
Another major hurdle for restaurants will be enticing enough customers back inside to make up for months of declines. Data are showing that in reopened states, foot traffic is still sparse. Foursquare, the location discovery app, recently found that fast-food foot traffic returned to normal numbers just a few days following Georgia’s reopening. But visits to casual restaurants remained lower than normal. Additionally, data from Toast show that more people than usual are still choosing to take out rather than dine in, even in states that have opened up.
People might be hesitant to return to restaurants because there is still uncertainty regarding how safe it is to do so. A survey by BentoBox, a website builder for restaurants, found that most people (more than 80 percent) intend to continue ordering delivery or pickup even after restaurants in their areas reopen; customers who do intend to resume dining in want to see obvious safety measures in place. Three in five said they would not return to a restaurant in which staffers aren’t wearing masks and gloves, BentoBox found, while at least 60 percent said that lack of personal protective equipment and being seated too close to other guests are red flags.
Fortunately for them many restaurants are already planning to make these changes. Most managers in our survey said when they reopen they plan to institute limited indoor seating, reduced table capacity and mandated social distancing in lines. Staff will be expected to wear face masks and get temperature checks before starting work.
Source: Eater survey of 335 restaurant owners across the country, asking “what new protocols, if any, do you plan to adopt when you reopen for dine-in business?”
Restaurant staffers are hesitant to work
Risk and uncertainty are also why many restaurant staffers don’t want to return to work. A survey conducted by Eater of more than 630 restaurant workers found that many food service professionals still feel safer remaining out of work.
In Eater’s survey 77 percent of restaurant workers said they are currently collecting unemployment insurance, part of the more-than-30-million people nationwide that filed unemployment claims since mid-March. It’s the primary source of income for 70 percent of out-of-work respondents.
Some unemployed food service workers are hesitant to go back because unemployment benefits offer more financial stability. 46 percent of respondents using unemployment benefits said they are making more money from unemployment than they would if they returned to work. Meanwhile 42 percent of workers receiving unemployment say they have avoided returning to work explicitly because the compensation would be less than their unemployment payments.
Source: Eater survey of 640 restaurant workers across the country, asking “what is your primary form(s) of income?”
As restaurants reopen over the course of the summer, many could struggle to find, pay, and retain staff. While a majority of workers who are furloughed or laid off say that they are confident their prior employers will rehire them in the next three months, 61 percent feel uncertain about their own health and safety if asked to return to work. Nearly half (48 percent) are temporarily avoiding returning to work for fear of COVID-19 exposure, while a staggering 95 percent of workers currently on the job say they are considering leaving the industry due to fear of being exposed to COVID-19.
As restaurant workers worry about the risks of returning to their jobs in the coming months, resistance to the government’s efforts to flatten the curve has snowballed: Businesses have opened ahead of guidelines, and many restaurant-goers have been caught crowding places and refusing to wear masks. This has prompted experts to warn of a second, potentially worse wave of the virus, which would only make the restaurant industry’s long journey to rehabilitation even more uncertain.
Vince Dixon is Eater’s senior data visualization reporter.