For weeks, many Bay Area restaurants have been serving food for takeout or delivery only, and struggling to get by. Now, they could be just a week or two away from reopening to diners, and in some counties, that is already happening.
The coronavirus pandemic has already wiped out a lot of food businesses, and those that survive will have to adapt with significant changes to a new reality, at least for the foreseeable future. Restaurants that can reopen will have to limit their capacity, institute all sorts of safety measures, retrain their staff, and then hope their customers feel it’s safe to eat out once more.
In Napa, KCBS Radio reporter and host of “The Stage of California”, Doug Sovern, spoke with renowned restaurateur, Cindy Pawlcyn, who owns Mustards Grill, which might invite diners back in by sometime next week. But she knows it won’t be the same.
“Tables will be sterilized before they come in, there’ll be dividers in between the tables, so it won’t be that crazy, noisy, wild, rambunctious Mustards it used to be, but it’ll be good food, good service,” Pawlcyn said. “Albeit with masks on and gloves, but it’ll be good service.”
For today’s “The State of California,” Sovern and anchors Jeff Bell and Patti Reising spoke with Jot Condie, President and CEO of the California Restaurant Association about what the pandemic has done to the restaurant industry, and what comes next.
Well, initially we had anticipated 20-30% of the restaurants that existed prior to the COVID-19 crisis would probably not reopen, but we’re seeing that in some areas—the Bay Area in particular—the number could go north of 30%, but we’ll know ultimately when all counties open.
Well, that’s one of the biggest challenges looming on the immediate horizon, if not happening right now, where restauranteurs are expecting a rent crisis of sorts. It turns out that a lot of the areas in California that could rely on predictable travel traffic are the places with the highest rents. Well, those travelers have dried up, at least for the foreseeable future, yet the rents are still high. So I think there are a lot of conversations happening between landlords and restaurant owners today.
I think you’re likely to see that and I think it’s a combination of just the startup costs, because essentially these are not just restaurants reopening, there are thousands of restaurants acting as if they’re startups. There’s new terrain out there, so there’s training costs that they’re all going to have to absorb. And, of course, the rent costs are there. In many cities in the Bay Area, this July, the wages are going up considerably in some cities.
But you have these cost escalators that are kind of based into the law in California relative to wages and other things, which will certainly be reflected in some of the prices.
Restaurants will obviously understand that customers are price sensitive and will do what they can do keep the prices down as much as possible.
A lot of the restaurants have qualified for government assistance on the federal level, from the state, the PPP and the like.
Good question. A lot of the restaurant owners who received the PPP funds are struggling with the parameters that are required to spend it (within 8 weeks). We understand there’s going to be an extension of that, perhaps coming out of Treasury, which will help significantly. But yes, there are a lot of restaurant owners—usually smaller, independently owned local restaurants—that weren’t able to access the original round of funds.
We hear there’s going to be another round coming out of Washington, D.C. That’s yet to be seen. But yes, there are a lot of restaurants that are in dire need of those funds.
Yea, you’re going to see that with some of the smaller restaurants that are confined to say, a small alleyway, where you have ten tables and are able to generate enough revenue to stay open, you need those people to come and eat in your restaurant, but it’s hard to distance tables six feet apart when you have a small dining room.
We’re seeing a lot of cities in California—like Palm Springs, Long Beach, we understand San Francisco may be one of those cities—that are trying to figure out how to accommodate restaurants’ dining footprint, whether it’s allowing them to use sidewalks or some streets. Some cities are thinking about closing down streets and parking lots to expand that dining footprint to allow restaurants to operate, hopefully, at 100% capacity if they can, but to do so six feet apart and safely.
I think a predictable and pre-Covid-19 level diners coming back out. I mean, that’s the big question mark. The operating guidelines that came out last week from the governor are going through that, and I think most of the conditions are going to be doable for the industry.
But the thing that they don’t know is: what level will the customers come back?
I think if we can wave a magic wand, they would probably say: we’d like all the customers who were here pre-Covid-19 to come enjoy food in our restaurant when the doors open again.
I’m not sure about groceries, but as far as takeout, pick-up and delivery, a lot of restaurants were able to just limp along with the takeout business.
Many restaurants that had a robust takeout and delivery business beforehand are well-positioned to succeed once doors reopen again, but you have a lot of restaurants that didn’t have takeout or delivery that are readjusting their business model to account for that. I think largely anticipating that customers will probably be timid about going back to restaurants and they need to get their revenue somehow. So you’ll see more takeout, more delivery in restaurants that otherwise wouldn’t have been doing this, but for this crisis.