Restaurants Say Socially Distant Dining Rooms Could Wipe Out Business

Gene Naumovsky

Many restaurants may not make it out of the pandemic due to capacity caps.

As social distancing guidelines remain in effect, many restaurants project months of revenue loss due to mitigation measures, according to the Wall Street Journal.

With restaurants taking new protective measures, such as plexiglass walls separating tables, cleaning staff, and distanced seating, costs are rising amidst falling streams of revenue.

President of Applebee’s, John Cywinski said, “This business model is fundamentally altered. There will be a likely contraction as a result of this.”

While some consumers have returned to eating out, a Cowen survey this month found that out of 2,500 U.S. consumers, 75 percent plan on staying away from restaurants. Yet, certain chains, such as Brinker International Inc.’s Chili’s and Cheesecake Factory Inc., have created to-go business models, pushing them nearer to breaking even.

When it comes to independent restaurants, the barriers prove far greater. With Colorado’s 50 percent capacity cap set on Wednesday, a survey of 250 Colorado restaurant operators revealed that almost half plan on permanently closing doors within the next three months.

In NYC, a study looking at 438 restaurants projected that 61 percent will not endure the city’s 70 percent occupancy limits.

Co-owner of Texas-based M Crowd Restaurant Group Inc. and White House task force of business leaders member, Ray Washburne said, “You walk in and it feels like a tomb.”

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Economics, Finance and Investing