In early 2021, U.S restaurants were allowed to increase their capacity from 50 to 70 % and reopen their establishments for indoor dining. All while continuing to maintain the six feet social distancing and mask mandates. Opening dining services to 100% capacity is underway in states like New York, Arizona, and Connecticut, with expectations to fully open by May 19th. However, Texas has been the trailblazer by fully reopening on March 2nd. There is not a lack of hungry customers; however, there is a lack of employees.
UNEMPLOYMENT
In Longview, Texas, Lamar Richardson, manager of Butcher Shop, say’s “I’m down about eight employees as we speak. And this has all happened in the last week. Every day, every shift, I have employees calling in or not showing up.” (Source). Most employers in Texas are experiencing similar circumstances and have limited their restaurant capacity due to staffing issues. The primary concern comes from restaurant compensation competing with unemployment benefits. Many workers across the country are distressed about the industry’s lack of a safety net, contributing to the problem. Andrew Chamberlain, Chief Economist at Glassdoor, made an analysis last year that saw a rise in data entry, warehouse, and “remote” positions. At the same time, restaurant positions remained vacant. To add to the issue, younger workers who traditionally fill these positions are opting not to work due to school commitments and the worry of getting infected. Corporate conglomerates stifle independent restaurants because of competitive benefits and stability. Additionally, parents are concerned about the risks of exposure and the effect on their children’s health. Restaurant managers have tried to incentivize workers with bonuses and hope the promise of a higher minimum wage will level the playing field.
GRANTS
Brighter pastures have emerged for restaurants as the government confirmed on Monday, May 3rd, that they will be adding another $28.6 billion towards Small Business Association (SBA) grants through the Restaurant Revitalization Fund. The maximum grant is $10 million, aiming to fix displaced revenue for restaurants with up to 20 locations. The SBA is dedicating the first three weeks of the program to fund women majority-owned/veteran-owned businesses and “socially and economically disadvantaged” applicants. (Source). Tamara Patterson, Chef Tam’s Underground Cafe owner, renovated her restaurant to 7,000 square feet with a 38 employee staff before the pandemic. She hopes the grant will provide her 11 remaining employees some needed time off and enough money to pay off lingering debt accumulated during restaurant shutdowns. Executive Vice President at the National Restaurant Association, Sean Kennedy, claims the grants are “an incredible first step that is going to help tens of thousands of restaurants.” Since the start of the pandemic, the industry has lost more than $270 billion; Kennedy is confident in receiving approval for more money if necessary. (Source).
Take-Out
While most high-end restaurants focus on reestablishing their robust customer service experience, the most vital business model that remains is takeout, and delivery, specifically, takeout drinks, has become a revolutionary change for the service industry. For example, the Fish Market Restaurant Group in California took a hit within their 5 locations but saw an opportunity in the temporary liquor law change passed by the state. Instead of serving liquor out of mason jars, the company reached out to Oktober Can Seamers to create specially designed cans to be distributed within the restaurant. As a result, Oktober Can Seamers have sold to multiple restaurants to create pre-mixed cocktails into convenient, portable cans, helping restaurants stay afloat and produce an extra revenue stream. Most companies say that takeout strategies will continue throughout 2021 as the restaurant industry steadily climbs out of its financial recession.