COVID-19 and the restaurant apocalypse

OPINION: The restaurant industry will not survive this pandemic — not without serious government support
By Corey Mintz - Published on Mar 23, 2020
On March 16, Ontario’s chief medical officer called for restaurants to close, unless they could switch to takeout and delivery only. (Dominic Chan/CP)

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I’ve been working from home for 11 years. So, in many ways, social distancing has not changed my daily routine too much. But the work itself changed immediately.

For the past few months, I’ve been working on a book. Most of my days were spent on the phone, speaking with U.S. and Canadian restaurateurs about the fundamentals of their industry and how it needs to change.

And then COVID-19 struck. Since then, the hospitality industry has all but ground to a halt.

For a while, restaurants carried on, doing their best to increase hygiene protocols. But eventually it became clear that no amount of cleanliness on the part of the restaurant could offset the public-health risk of small, crowded spaces. Industry leader Jen Agg (of Toronto’s Grey Gardens, Rhum Corner, Bar Vendetta) was the first I saw to announce the closure of her restaurants. On March 15, she shut all her businesses and gave away the food to her staff. Soon after, other owners, who had spent the previous week promoting the safety of their restaurants, began to follow suit.

On March 16, Ontario’s chief medical officer called for restaurants to close, unless they could switch to takeout and delivery only.

My Monday was supposed to begin with a conference call. I was scheduled to interview a restaurateur with businesses in Toronto and Los Angeles. Over the previous week, most of my interviews had cancelled, as restaurant owners needed to focus entirely on how COVID-19 was ravaging their businesses. But an email reminder told me to expect a call with five team members.

When I dialed in, I heard a message that said something like “You have joined the conference call. But you are the only one here.” I listened to the message repeat for five minutes, my mind replaying various Twilight Zone episodes — “Time Enough At Last, Where Is Everybody?”, “King Nine Will Not Return,” “Stopover in a Quiet Town” — in which people find themselves alone on a deserted Earth. After having waited and listened long enough that I had begun to question whether I were now the last human alive, I clicked off and called the restaurateur’s cell. She was, like every restaurateur right now, in a state of panic. She knew she had to shut her businesses down immediately. But with multiple restaurants, 1,000 employees, and all her money invested in new restaurants currently under construction, she had no idea how to proceed without revenue. She said had not slept in days.

Life is changing fast for a lot of people. As individuals, we all have different levels of health risk and different capabilities to work from home. Most of us will be fine in the long run. Some will learn to cook. Some will swear off it forever. Many will not economically survive the pandemic. The restaurant industry certainly won’t — not without serious government support.

Buying gift certificates and merchandise, or pre-booking and paying for corporate holiday parties now, are helpful steps that will generate immediate revenue for these cash-strapped businesses. But that’s not enough. That’s not sustainable. And the money won’t go to workers who are being laid off. Some of these people will find work in food production or retail. I spoke with the head of a tofu company today who said that demand is up 100 per cent and that he’s trying to hire recently laid off restaurant workers to increase production. My butcher has reached out in a similar way, offering temporary work to industry people in need. This won’t be an option for everyone. Pivoting to delivery will not save full-service restaurants. The predatory tech companies that facilitate third-party delivery take 25 per cent commissions. And these sales make front-of-house staff redundant.

Restaurants, which typically operate on a 4 to 12 per cent profit, have huge operational costs. Invoices from food suppliers, payment due in 30 days, pile up constantly. Rent is a killer. But payroll is the big one. Unlike Humphrey Bogart in Casablanca, who vows to keep staff paid while his club is shut down by the Nazis, most restaurateurs won’t be able to retain employees even if they want to. Those who can won’t be able to do so for very long. A lot of people, already living paycheque to paycheque, will be out of work and unable to find jobs because their industry has shuttered overnight.

President Donald Trump has already held a conference (call, obviously) with CEOs from America’s biggest restaurant companies — Domino’s, Subway, Yum Brands (Pizza Hut, Taco Bell, KFC), Restaurant Brands International (Burger King, Popeyes, Tim Hortons), etc. — so you can guess where bailout money will go. The chains that pay lobbyists and have the ear of politicians will be first in line for stimulus funding, subsidies, and/or tax breaks.

In Canada, this conversation hasn’t started yet: 1.2 million Canadians work in the restaurant industry. That’s 7 per cent of the workforce.

Ontario has enacted a few helpful measures, such as the suspension of driver’s-licence renewals and evictions. But debt is going to rack up fast for people out of work.

Hilary Dixler, at Eater, has called for rent alleviation. This is the bare minimum of what employees and employers need. And they need it fast. This conversation needs to happen within days — not weeks or months.

Otherwise, as Agg says, when this is all over, and we emerge from hibernation, there won’t be any restaurants left where we can eat, drink, and celebrate with one another.

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