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Dine-in restaurants see takeout success as a recipe for the future

Sara Hossaini Aug 3, 2020
Heard on: Marketplace
Many restaurants, like this one in Washington, D.C., are relying on takeout only during the COVID-19 pandemic. Nicholas Kamm/AFP via Getty Images

Dine-in restaurants see takeout success as a recipe for the future

Sara Hossaini Aug 3, 2020
Many restaurants, like this one in Washington, D.C., are relying on takeout only during the COVID-19 pandemic. Nicholas Kamm/AFP via Getty Images

Restaurants around the country have had to change their business models because of COVID-19. The pandemic has forced some out of business; but others are trying to adapt with different models.

The owners of one high-end restaurant in Berkeley, California, called Comal, have opened a new restaurant in Oakland during the pandemic as a takeout operation. 

Restaurant workers at the new operation, Comal Next Door, in Oakland’s Grand Lake neighborhood, shuttled brown-bagged orders from the kitchen to several rows of holding racks on the eatery’s first Friday night. The bags were destined for pickup customers waiting outside and a stream of double-parked delivery drivers.

Co-owner John Paluska is upbeat. But that wasn’t the case just a few months ago, when the Bay Area began its COVID-19-related shutdown.

“When this whole thing hit, we were just about ready to open as a regular, old restaurant. … The initial response was, ‘Oh, my God, this is a disaster,'” Paluska said.

Paluska already owned two side-by-side restaurants in Berkeley: the more upscale, dine-in Comal, which offered plates for two to three people to share for up to $56, and a more casual cantina offering takeout. And those less-expensive takeout offerings — burritos, bowls and tacos, and a few dine-in favorites — started flying out the door. In fact, the cantina, also called Comal Next Door, recently had its best day ever.

“We’re actually over 100% of our historical high-water marks,” Paluska said.

Paluska is using the same approach for the new restaurant in Oakland and can’t see changing it anytime soon, even once indoor eating is allowed. Now, refrigerators and shelving racks have taken over the original Comal’s former dining rooms.

“And we’re having enough success with this where we feel like we were just looking at this, like, we just want to ride this out until we’re on the other side of the pandemic. And I think it’s gonna be a long time,” he said.

As the pandemic continues, he wants to protect the health of his staff. After having laid off all of his employees early on, Paluska’s been able to hire about half back, thanks to a Paycheck Protection Program loan. 

Jot Condie, president of the California Restaurant Association, said pickup is the new dine in, “where you have talented chefs creating what used to be food served on a white tablecloth putting out quality food in a sort of grab-and-go type of setting and are sort of meeting the demand of the customers as they’re evolving.”

Condie estimates that about a third of California eateries won’t survive the pandemic, and he predicts the overall restaurant failure rate will be even worse, up to 50%, in urban areas that rely on tourists, like San Francisco.

So the city is looking at other models for the future.

“We have an economic recovery playbook that we built,” said Jay Cheng, with San Francisco’s Chamber of Commerce. “And commissary kitchens, like shared kitchens, and helping restaurants pivot to takeout and delivery is our top priority. It’s like what we think is the future of the restaurant industry. It has to be.”

Cheng said restaurants that can shift their operations won’t necessarily be raking in the cash, as takeout margins can be thin, but they might be able to survive.

Back in Oakland, longtime Comal customer Dave Collins is picking up his takeout order from the newest spinoff restaurant. 

“I got a veggie bowl and a carnitas bowl. We’re going to share it. And a giant cocktail,” he said.

That’s right, a giant cocktail — to go.

COVID-19 Economy FAQs

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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