The state of Texas has lost more than 15% of its restaurants, and more are likely to be shuttered, having fallen victim to the lockdown that ensued as a result of the COVID-19 pandemic.
“Since the start of the pandemic response, we’ve lost 15,000 restaurants, with that number projected to increase over the coming months,” says Dr. Emily Williams Knight, President, and CEO of the Texas Restaurant Association.
The alarming news makes clear that our local restaurants continue to need our support, particularly since months of tough times are still ahead. Those of us who can eat out must continue to do so if we hope to avoid the blight of empty storefronts, the result of owners packing it in after a painful attempt to stay open.
Still, local restaurant owners are thankful for the support from their communities.
“I’ve been amazed at the support we’ve received,” says Luis Argote, owner of CoolGreens Southlake, a popular healthy eatery specializing in sandwiches, salads, wraps, and bowls. “The support is unlike anything we could have imagined. We love the people of Southlake, and those in surrounding areas who continue to visit CoolGreens Southlake.”
While local restaurant owners are happy to serve customers at reduced capacity, the overwhelming majority are still not able to generate enough revenue to cover staff salaries and overhead. Even with Governor Abbott’s recent extension of capacity limits to 75% occupancy, required social distancing means most restaurants will be unable to add additional seating or customers.
One owner, who requested anonymity, said he is barely able to cover the reduced-staff paychecks. His landlord granted him rent forbearance in the early days of the pandemic, but that rent is now due, along with deferred vendor payments.
“It is all coming together at the same time, and we can’t handle that title wave of liabilities while struggling to operate at even [75%] capacity,” he said.
Restaurant owners have it tougher than most businesses, largely because they must allay customers’ fears about eating out, implement the required standard health protocols, and invest in personal protective equipment (PPE) and physical changes to their restaurant to address the growing role of carry out and delivery. Accounting for 51% of the food dollar for Texans, restaurants play a critical role in feeding our communities, and they continue to do just that while addressing a mountain of stressors on their businesses.
“Restaurant owners have been gut-punched,” says TRA’s Dr. Knight, who helped create the Texas Restaurant Promise, a document that can be placed near the entrance of Texas restaurants to make visitors aware of ongoing health and safety practices. “At the peak of the crisis, the industry lost an estimated 700,000 jobs and more than $3B in revenue. Now, six months in, there are still 200,000 workers on the sidelines and roughly $7B in lost revenue. The restaurant industry is clearly the hardest-hit industry in the state of Texas and they need their communities to lean in now more than ever.
Dining out has been forever changed. Customers now expect curbside service, which experts believe will become a staple of the industry. This means restaurants that have never considered drive-thru or pick up service before the pandemic will need to perfect the experience or miss out on a sizable portion of business.
Restaurants have also strengthened their position in delivery, as they look to deliver directly versus using third-party delivery companies whose fees eat into already-slim profits. Running a delivery business is challenging, but this trend is also here to stay. Restaurants must transform accordingly, tweaking their layouts, digital strategy, and customer engagement activities.
To capitalize on this new reality, restaurants must adapt in very clear and very specific ways, says Knight of TRA.
“With dining rooms operating at limited capacity, restaurant owners and employers are navigating uncertain ground,” she says. “They are continuing to work through new models of service, like delivery and carry out; experiencing rising meat prices and costly PPE; and learning to create customer trust in the new world of the ‘restaurant experience’ post COVID-19.”