Louisiana Restaurant Association Stan Harris joined Newell Wednesday afternoon to discuss the trials and challenges restaurants in the Bayou State face as Phase Two continues, cases rise across the state and the specter of additional occupancy restrictions loom on the horizon.
“Stan, the momentum that was created by your industry over the last five years has been second to none,” Newell began. “The numbers have been very, very impressive, but obviously the pandemic comes and brings with it a completely stifling impact on growth. Where do you stand today?”
“Look at what everyone is trying to do today - they’re trying to innovate and adapt to capacity restrictions as well as social distancing requirements that are part of these guidelines everyone has to follow,” Harris said. “The challenge for all of us is that we have to identify the bad actors and get them to comply. That puts pressure on everyone else in the industry when people are following those guidelines. That said, the industry is leaning forward but still struggling. Restaurants are not built for this. If a restaurant has 150 seats, it’s not made for 150 guests, it’s made for more like 250 in order to get to a point where they’re breaking even or making money. We’re pivoting to do all kinds of take-out businesses, family dinners, cocktail kits, and that sort of thing, but it’s not generating enough revenue to be sustainable long-term.”
“I have a huge concern that we’re going to lose a number of restaurants,” Newell continued. “The type of restaurants we have here are vastly different from what you find in most other cities. We’re not big on chains - we have them, but they’re not as prevalent as they are in other areas. Have you been able to quantify the numbers of restaurants that have had to hang it up?”“We know that 4-5% of the restaurants that closed because of the pandemic aren’t coming back, and we have projections for New Orleans that say as many as 30% of our full-service restaurants could go away,” Harris answered. “Now, is that a hiatus, where they don't come back for a year? Or is it permanent? We really don’t know that yet. The worst time of the year is summer and coupled with the pandemic, this is a real challenge. Rent and lease permits don’t go away. The cost of goods has gone up, meat and poultry prices rising dramatically, and those are things that are really kye to generating a profit. When you can’t get rent relief, can’t lower the cost of the goods you buy, it puts a lot of pressure on operators and may cause them to wonder why they’re staying in business right now.”