How the Coronavirus is Affecting Restaurants

As of this writing, the coronavirus COVID-19, which was first discovered in December of 2019, is affecting people in 136 countries and territories around the world. Over 142,775 people have been infected with 5,374 reported deaths. Borders are closing, travel is being suspended, and stores are limiting their sales of disinfectants. On March 10, WHO declared the virus a pdandemic.

Keep in mind that an estimated 1 billion cases of influenza are reported every year, around the globe, and that the flu causes anywhere from 290,000 to 650,000 deaths in a single year.

So, one wonders, what is the root cause of the panic that seems to be sweeping across the country and the world? Fear of the unknown and a news media whose ratings have undoubtedly soared as people tune in to see the latest worldwide reports on the quickly encroaching virus have undoubtedly contributed. Will it mutate? What is the mortality rate? The world is becoming smaller as Italy is placed in lockdown, Israel closed its borders, and New York created a coronavirus containment zone.

With the current news headlines and panicked public, it’s easy to see how and why restaurants are being affected at an alarming rate.

The Effect of the Coronavirus on Restaurants

While fear of congregating in public places has taken its toll on restaurants in general, Chinese restaurants have been the hardest hit. CNBC reported on Bo Ky, a restaurant located in New York City’s Chinatown. Before the outbreak, they seated approximately 120 customers every day. Now, that number is down to 30 or 40.

As the virus has spread, and President Trump declared a State of Emergency, restaurants across the country are feeling its effects. New York recently mandated that restaurants and bars have to cut in half the number of customers they usually serve, in order to provide more space between patrons. According to the CDC, the coronavirus can spread between people who are up to 6-feet apart.

Washington State has had more cases of the virus than any other in the U.S., leaving Seattle restaurants, among other areas, seeing traffic diminish. Chef Tom Douglas, restaurateur, author, and radio talk show host, is closing 12 of his 13 Seattle-based restaurants at least for three months due to declining sales. He’s seen a 90 percent decline in sales across the board since the coronavirus first struck.

Restaurants are bracing for impact, not knowing how long this disruption will last, or how they will keep staff employed as well as the doors open.

What the Coming Months may Bring

Every day another headline catches our attention. The NBA and NCAA suspended their seasons, more than 100 colleges have canceled their in-person classes and are teaching online, music festivals and even masses have been postponed or cancelled.

And, in the face of mounting fears, closures, and concern over the global trade and economy, the stock market is plummeting.

Washington’s Governor Inslee said that people should no longer be cramming themselves into local bars. According to Inslee, such socializing, in our current pandemic, is “just totally unacceptable.” The governor recently banned public gatherings of 250 people or more in three counties. California and Oregon are following suit.

It’s safe to say that it’s going to get worse before it gets better. It’s also safe to say that, “this too shall pass.” The peak of China’s epidemic has passed—just about three months after the onset.

How Restaurants are Easing the Public’s Fears

A woman in a grocery store was almost in a fit of rage when she found that the disinfectant wipe dispenser was empty. Another customer at Costco reported feeling very grateful that there was someone that wiped down the handles before handing her a cart, while others throughout the store were busy cleaning shelves and commonly touched objects on an almost constant basis. It’s clear that the public is looking closely at what businesses are doing to ease their fears and help keep them safe.

Here are a few steps those in the restaurant industry can take:

–Like Costco, show your commitment to keeping your customers healthy by wiping down all public contact surfaces on a regular basis. The EPA has released a list of disinfectant products under its emerging viral pathogen program which can be found here. Some restaurants are adding sanitizer dispensers and removing tables to increase the distance between diners to at least six feet.

–Though the current labor pool challenge makes it difficult, the CDC and other regulatory bodies strongly recommend that any employees that show signs of illness should remain at home. Some go so far as to suggest that employees with sick family members at home should not go to work in case they are in an incubation phase.

–And, of course, make sure employees are taking extra precautions when washing their hands such as removing rings, cleaning under nails, and washing for 20 seconds.

Steps Restaurants are Taking to Survive the Effects on Business

As the pubic starts to self-quarantine, restaurants and bars will experience a significant drop in traffic. Many with a solid delivery service may be able to offset this economic hardship as customers stay home for meals.

The New York Times reported on Tucci, a restaurant in Lake Oswego, Oregon, where the local school shut down after an employee tested positive. Though their in-house business was down, their takeout orders were up.

Restaurants are reducing the number of tables in order to increase the distance between customers. Others are bringing takeout food to customers’ cars. On March 14, Taco Bell announced that they would be closing their dining rooms and only be open for drive-thru or delivery.

Help for those businesses and restaurants hardest hit may come in the form of a bill from Congress. The “Small Business Relief from Communicable Disease Induced Economic Hardship Act” would allow business owners to access Economic Injury Disaster Loans of up to $2 million to cover expenses.

Some states are urging businesses that are being affected by the coronavirus to apply for the Unemployment Insurance Work Sharing Program which allows employees that have had their schedules reduced to collect unemployment benefits for lost hours. Here are the states with these types of programs as of June 2019.

If the pandemic continues for any length of time, it is inevitable that there will be a supply chain interruption. After President Trump’s speech on March 11, in which he imposed a travel ban that included much of Europe, I stopped by my usual supermarket. Every cart was piled high, and the line was 10-deep at every checkout. The fear of a break in the supply chain was palpable, and people were stocking up in case the worst case scenario occurred.

Restaurants may want to anticipate some disruption and stock up on paper goods, specifically custom made, and look for domestically produced products.

Riding out the storm amidst declining sales can be difficult at best, but there are opportunities to drive income which will mostly come in the form of pick-up and delivery. To cut costs, consider negotiating with your landlord. In a time of hardship, many will consider deferring rent and allow tenants to pay in weekly installments once the pandemic has passed. And pass, it will.

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