The list of cities and states now mandating that restaurants close their dining rooms and switch to delivery- and takeout-only models continues to grow as governments and businesses work to slow the spread of coronavirus across the U.S. These moves arrive just as the CDC advises against gatherings of 50 or more for the next eight weeks.
As of Monday morning, Ohio, California, Illinois, Massachusetts, New Jersey, Connecticut, and Washington state have ordered bars and restaurants to close or switch to off-premises formats. New York City and Hoboken, N.J. are also requiring restaurants to shutter dining rooms, and around the country individual businesses have been voluntarily closing their establishments for the last few days. Starbucks and Chick-fil-A have moved all stores to a to-go model, Momofuku shuttered all of its locations, and Danny Meyer’s Union Square Hospitality group closed all its restaurants. Those are just a few names on a list that will in all likelihood include most restaurants in the U.S. in the near future.
How restaurants will manage this shift and what will happen to existing staff varies city by city, restaurant by restaurant, and in some cases by restaurants within the same brand. Starbucks, for example, is currently keeping the bulk of its locations open for delivery, mobile pickup, and drive thru orders, but will completely shut stores at malls and universities and in areas with “high clusters of COVID-19 cases,” according to a letter from the company.
Celebrity chef Jose Andrés, meanwhile, said he would be closing all of his restaurants but that some of them would be transformed to community kitchens staffed by volunteers giving takeout meals to those in need. Existing employees will get paid leave in the meantime.
Other employees are not so fortunate. Seattle chef and restauranteur Tom Douglas has closed 12 of his 13 restaurants and laid off staff, saying that he will rehire them once business reopens.
And, of course, many businesses are switching to off-premises-only models and will be able to fulfill delivery orders and in some cases those placed at the drive-thru. On the one hand, that’s a plus for existing staff, who presumably in most cases will be able to keep their jobs. However, delivery, especially via third-party apps like Grubhub and Uber Eats, remains a challenge for many businesses, especially independent ones. Commission fees these services collect per transaction are often prohibitively high for small restaurants. And with recession looming (probably already here, actually), there are questions around whether consumers will even want to pay the delivery and service fees required to get restaurant meals sent straight to their homes.
Most of the major delivery companies have responded with initiatives aimed at smaller restaurants and customers at this time. Uber Eats just announced it will waive all delivery fees for orders at independent restaurants. And last week, both Grubhub and Postmates announced they will waive commission fees for independent restaurants for the time being.
However, not all restaurants are set up for delivery, and some worry that the closing now will permanently put them out of business. One owner told the L.A. Times that his shop is not set up for delivery and that, ““The numbers really don’t make sense; that’s why we haven’t done it in the past.”
Whether delivery companies negotiate more affordable rates with new restaurant customers during this time remains to be seen. Postmates, for example, said it would waive all commission fees for independent restaurants in San Francisco that sign up with the service. Others may follow.
We’ll be updating this post regularly, so check back for more news on restaurant closures as well as how businesses, delivery companies, and customers are managing this situation.