Only 1 in 5 restaurant owners believe with certainty that they’ll survive the COVID-19 pandemic, according to new survey data from the James Beard Foundation and the Independent Restaurant Coalition (IRC).
Since the pandemic broke out and states mandated dining room shutdowns, IRC and the James Beard Foundation have been polling chefs and restaurant owners. A total of 1,4000 owners from mostly small and/or independent restaurants responded to the latest survey, which closed last week on April 13.
“The data is clear: The Paycheck Protection Program isn’t working as designed for restaurants and Congress needs to fix it,” Clare Reichenbach, CEO of the James Beard Foundation, said in the survey announcement.
Some of that data includes:
- Nearly 80 percent of independent restaurant owners said that government stimulus assistance won’t save businesses from shuttering permanently.
- Over 38 percent of respondents said they have closed temporarily or “potentially permanently.”
- Over 77 percent said they have seen at least a 50 percent reduction in sales.
- More than 5 in 10 restaurant owners estimated needing $100,000 or less over the next quarter to remain viable to reopening.
Some argue that delivery and off-premises orders are vital to restaurants’ survival during this time and indeed one of the only lifelines businesses have while dining rooms remain shuttered. None of that is untrue. It’s just that said lifeline provided by delivery and takeout isn’t as helpful as some folks — usually delivery companies and delivery integrators — make it out to be.
Case in point: two-thirds of restaurants surveyed by the IRC and James Beard are “uncertain” that off-premises can sustain their business until they reopen.
“Staying open is going to require a rethinking of our business models,” said IRC founding member Kwame Onwuachi.
Rethinking business models so that they’re geared towards delivery and takeout models means not just having the cash to pay the commission fees third-party delivery services charge (which only some services are currently waiving). It also requires an operational overhaul and retraining of staff, while simultaneously trying to keep everyone safe and maintain high cleaning standards.
Some restaurants are visibly struggling to even offer takeout meals efficiently. Others have closed up shop entirely for the time being, citing concerns over workers’ health. And, to beat a dead horse for the hundredth time this month, the fees lobbed at restaurants by third-party delivery services can go as high as 40 percent per transaction. As one restaurant owner told me, delivery doesn’t make money, at least not for the bulk of independent restaurants.
So what do we do?
Average consumers can jump online and contribute to relief funds and charities for restaurants, and order directly from restaurants for pickup. Really, though, this is one problem tech can’t solve. As IRC and James Beard note, the industry, and especially independent businesses, need adjustments made to the PPP loan program and probably much more.
