A growing number of restaurants, some of which barely survived the covid-19 pandemic in 2020, are raising alarms that the delta variant could finish them off, as state and local governments move to reimpose mask mandates and many workplaces appear poised to halt reopening plans.
The delta variant has created multiple levels of strain on eateries.
It has made many diners more anxious about entering a public space. It has forced waiters and bartenders to revert to their agonizing role as public-health enforcers. And it has forced many restaurants to consider closing indoor dining rooms and relying solely on takeout orders and outdoor dining for revenue at a time when food-price inflation has made their margins very thin.
The industry appeared to roar back to life in May after the U.S. Centers for Disease Control and Prevention said fully vaccinated people could safely forgo face-coverings in most public settings. Sales soared, reaching an all-time high in June of $70.6 billion, up from under $30 billion in June 2020, according to data from the U.S. Census Bureau.
But spurred by a national surge in covid cases, the CDC on Tuesday revised its guidance, recommending vaccinated people wear masks indoors in areas with high rates of covid-19 transmission. Eight states, plus Washington, D.C. and Puerto Rico, now have reimposed indoor mask rules. Industry experts say they are already seeing new “guest hesitancy” at restaurants spurred by infection fears, pushing down diner numbers at a time of year when many eateries rely on strong summer sales to offset frequently lousy September numbers.
“The biggest issue right now is industry fatigue,” said Kathy Hollinger, president of the Restaurant Association of Metropolitan Washington, after hearing Thursday afternoon about D.C.'s new mask mandate. “Downtown D.C. is still struggling, people are not back at their offices so we’re not seeing that lunch business.”
In the past week, a number of Sun Belt metro areas such as Miami, Naples, Scottsdale and San Antonio, have seen significant drops in diners, according to data from OpenTable, an online restaurant-reservation service, corresponding to where infection rates are high or rising quickly.
There is a chance that different restaurants will face different issues, given that the new CDC change is a recommendation and not a mandate. That means it could be implemented differently, said Erika Polmar, executive director of the Independent Restaurant Coalition, an industry lobbying group. She said there could be tension in the dining rooms that remain open if mask recommendations are imposed.
“Restaurant employees face the challenge of being the police with ever-changing guidance,” she said, alluding to the many documented instances of conflict between restaurant workers and would-be diners over masking rules. “This makes restaurant workers the bad guy and adds additional stress when guidance isn’t clear. What we’re looking for is permission to be cautious.”
Gerard Craft owns a group of eight restaurants in St. Louis. He said the ever-changing rules for restaurants have been confounding. At first, there was no indoor dining, then rules were changed to allow 50 percent capacity. At one point they were allowed to serve cocktails as “to-go” beverages, but then that was changed as well. He said this often puts restaurant staff at odds with customers.
“Every step we take makes us unpopular with someone, even if it’s the right thing to do,” he said. “We’ve exhausted our savings and taken on debt to protect ourselves, and what we’re fearing right now, seeing numbers start to pull back again, is that we’re headed back down another road where people are scared to go out.”
He said in the past two weeks his business has dipped 20 percent as people digest the news about the delta variant, breakthrough infections and the CDC’s new thoughts on masking. He said his restaurant group didn’t receive a restaurant revitalization fund grant. These grants were part of the American Rescue Plan Act, which provided financial relief to roughly one-third of the restaurants that applied before all of the money was depleted at the end of June. He said he’s barely making ends meet.
“Requiring masks or proof of vaccination, it’s obviously the right thing to do, but we will lose a lot of customers as a result. [St. Louis] has a low vaccination rate, so we will lose a lot of people,” he said.
For diners like Adam Yosim, all the news about the delta variant has meant he and his wife are resuming masking and ordering takeout instead of sitting indoors at restaurants. Yosim is a public relations professional for Stanton Communications in Washington, D.C., but has lived in Boca Raton since the pandemic. Before covid-19 hit, he would dine out up to four times a week, following the latest trends and food influencers. He said now there’s “no need to risk it,” although he recognizes this could be another blow to “restaurants that have been doing everything they can to claw their way back.”
Earlier this week, the San Francisco Bar Owner Alliance, a coalition of more than 500 bars, made headlines for announcing it will require patrons to show proof of vaccination or a negative coronavirus test before they can drink inside. Also, New York restaurateur Danny Meyer announced a vaccine mandate for staff and customers at his restaurants, and a restaurant in Huntington Beach, Calif., made waves by posting a sign saying it requires customers to provide “proof of being Unvaccinated.” All were greeted with equal parts praise and outrage.
Chef and rock guitarist Cheetie Kumar, who owns Garland in Raleigh, N.C., saw the writing on the wall and had a staff meeting Wednesday evening. She decided to preemptively return to outdoor dining and takeout only. This is in part prompted by a scare last week: A vaccinated new-hire in the kitchen tested positive for covid, shutting the restaurant for business last Friday while everyone got rapid-tested.
“I’m just so tired,” Kumar said. “With the great management team we have, I can start to see them crack. They are crumbling under the pressure, and everyone is really scared. I don’t feel like it’s fair for my staff to bear the brunt of this.”
The “this” in question is not only surging cases and conflict over masking and vaccination. Restaurants have had to raise wages to attract sufficient staff and prices for ingredients have surged, said Marshall, the Detroit restaurant owner.
“Poultry prices have spiked, and the cost of my organic produce has tripled. Certain seafood I can’t even get — crabmeat, I can’t get it. As a result, I’ve had to reduce my menu. Other things I’ve had to take a loss on,” she said. “Combine that with the labor shortage: I’m considering closing down another day because of staffing, down to four days because there’s not enough labor to go around.”
She’s started to see a reduction of diners in ordinarily booming summer dining times for Detroit restaurants, before what is usually a slow September and October.
In Seattle, Steve Hooper of Ethan Stowell Restaurants (How to Cook a Wolf, Anchovies & Olives, Tavolata) said seafood prices are “through the roof,” with lobster up 50 percent, and other supply-chain snags are impacting business: He ordered stools for a new restaurant in March; they haven’t arrived and the opening is delayed.
Jasmine Donovan, president of Dick’s Drive-In Restaurants in Seattle, said she can’t buy mustard right now. Or salt. Or berry topping for sundaes: “And everything costs more, if we’re lucky enough to be able to buy it.” Trey Lamont, the owner Jerk Shack in Seattle, said chicken prices have more than doubled and he can’t get Hennessy or other cognacs.
All of these headaches are accentuated by the growing threat of the delta variant and renewed discussions about masking. The Washington Hospitality Association in Washington State calculated that the average restaurant lost $20,000 per month last year. This means the average owner is in debt by more than $100,000, and often that debt is personally guaranteed with their home or car.
Alex Susskind, associate dean for academic affairs at Cornell’s School of Hotel Administration, said that while labor shortages, increased ingredient prices and supply-chain bottlenecks don’t paint a pretty picture for the restaurant industry, consumer demand might pull them through this next crisis.
“There is huge pent-up demand for consumers to get back to normal. They are tired of having their food out of a cardboard box,” he said, but he stressed that, based on vaccination levels and how mask-averse a community is, there is great regional difference in what restaurants can or should do. And, he said, state and local regulations must do what they can to “give restaurateurs the absolute maximum potential for earning,”
“In New York, for example, they stopped allowing alcohol takeout. I think that’s a mistake, frankly,” he said.
Caroline Styne, co-owner of the Lucques Group, which has two restaurants and a catering business in Los Angeles and does the food and wine at the Hollywood Bowl events venue, said she was feeling far more “bullish” a month ago, and “like we were getting back to normal.” She said her company lost $800,000 in 2020 and she now fears they are looking at another six months of reduced sales.
“We’re still on the brink of survival. We are not yet operating at a profit, insanely short staffed and short supplied. Patience levels are really thin,” she said.