COVID-19 Is Killing Restaurants
As a small business owner, I can tell you first-hand that the pandemic has hurt my business. Without a doubt, almost all companies have been impacted, but small businesses and restaurants have taken a major hit.
I will start with restaurants since they are a breed unto themselves. Restaurants have been forced to close for extended periods of time. Even though they are open at the moment, they can only be open with dramatically reduced capacity and extreme sanitation requirements. Those surviving have done so by perfecting their takeout offering. Some restaurants in survival mode have gone to takeout only. The restaurant survives, but the servers that live on tips are out of a job or facing reduced income. With the surge in cases, the restaurants are facing another possible shutdown. The best-case scenario for restaurants is to perfect its takeout process while not impacting eat-in customers.
A perfect example, my family went to eat the other evening in a restaurant that has half-capacity seating and takeout service. The takeout orders were being given a priority to eat-in diners. We waited an hour for our food. The situation was probably exasperated by our waitress not checking on us and letting us know about the delays. Ironically, when we chose to leave the food was suddenly ready. At that point, we told them to keep it. Because of this experience, a restaurant that has been feeding my husband for 45 years lost a customer.
The Federal Minimum Wage for tipped employees is $2.13 per hour. (Source: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped.) There are states that this rate is higher because of the cost of living. For the most part, tipped employees don’t make enough to live without their tips. Without tips, these employees make more on unemployment so they need to be enticed to work. Most people want to work, but they won’t if working means less income. One possible option would be to offer a higher hourly rate during this alternative work environment. With proper staffing and training, takeout orders can be the lifeline a restaurant needs to stay afloat. The problem with this logic is that operating expenses are already higher. Expenses are higher because of all the increased sanitation and safety regulations that have been imposed.
This past September, the National Restaurant Association released survey results that nearly 1 in 6 restaurants have closed permanently or long-term. This results in an astronomical number of unemployed workers. The industry has to find ways to keep restaurants afloat. At this point, federal aid hasn’t been enough and more assistance is needed.
The struggles of the restaurant industry are having a domino effect on suppliers as well. Meat and produce producers are obvious but consumables such as paper products, garnishments, drinks, etc. have been impacted as well. Truckers and other distribution and support industries have taken a hit as well. Until the pandemic is under control and businesses are allowed to operate as normal, this economy will continue to suffer and unemployment numbers will remain high.
