The restaurant industry is already struggling to stay afloat
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The coronavirus is hitting the services sector pretty hard. The governor of Oregon ordered bars and restaurants to close for anything other than takeout on Monday. The same thing is happening all across the country, especially after New York and Los Angeles shut things down, too. So how’s the restaurant industry dealing?
Back in February, the Taiwanese restaurant 886 in Manhattan started seeing a steady slowdown. Co-owner Eric Sze said the drop-off in business was manageable at first.
Then last Thursday, New York City declared a state of emergency.
“And then, just, poof,” Sze said. “Nobody came.”
Sze said by Friday, revenue was down 80%. That cut directly into the cash he uses to pay his employees, buy supplies and pay rent. A restaurant like his doesn’t have a buffer to sustain a hit like that.
“You’re operating on crazy, crazy thin margins,” he said.
On Sunday, Sze closed down the restaurant and sent employees home. That same day, Emmeline Zhao, who manages Little Tong Noodle Shop, shut down one of her three Manhattan locations.
Zhao said the restaurant industry is already risky, and something like this can be devastating.
“We’re seeing only the beginning of it, and it terrifies me,” Zhao said.
New York City’s Department of Small Business Services is offering businesses grants and zero-interest loans.
“That money could go to anything,” said Gregg Bishop, the department’s commissioner. “It could be to install a point-of-sale system, it could be to do something different than they normally would have done.”
A group of independent restaurants around the country is offering discounted gift cards. They call them “dining bonds,” and the idea is to keep cash coming in. Other restaurants are trying different strategies.
Steve Chu runs a restaurant called Ekiben in Baltimore. He’s now focusing on app-based ordering and delivery. And also bleach to keep the whole process clean.
“Like, our door handle used to be black, now the silver’s definitely showing,” Chu said.
At 886 in New York, Sze will start selling beef noodle kits customers can heat up at home.
“I’m heading in after this call to prep, actually,” he said, adding that he’ll use the proceeds to pay his employees — who are now out of a job.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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