Imagine there’s a giant thumb coming out of the sky, squishing small restaurateurs. Then imagine mounds of fire ants among them, biting each restaurant owner on the butt.
The thumb is the COVID-19 pandemic. The fire ants are stinging reminders that nothing during the coronavirus crisis is easy.
You’ve likely read about the big challenges of the pandemic. Chefs and servers have gotten sick or have died. Family-owned restaurants are more in jeopardy of closing in the next 45 days than they have ever been before. They’re battling rising food costs, unforgiving landlords, the death of fine dining and the woes of workers who made more money during unemployment than they did on the job.
But what about the little things? Those are worth documenting, too, because they expose how a series of little business decisions could contribute to a restaurant’s ability to survive. Or fail.
For Liz Baron, who has operated Blue Mesa Grill for 32 years, she’s taking one day at a time. “Our view is we just have to make it until things get better,” she says.
“We just have to hang on.”
What follows is a list of challenges most restaurant diners might have never thought about.
1. Paying for nonexistent sports fans.
Tom Melesky, the owner of Press Box Grill in downtown Dallas, can fill 50% of his restaurant because of Gov. Greg Abbott’s order to temporarily limit crowds. Melesky’s DirecTV bill is tied to the number of seats in his establishment, which is about 100. He tried convincing DirecTV to lower his rate temporarily, with no luck. So he’ll pay up to $1,500 a month during football season, when more than half of the people he’s paying for aren’t actually sitting there. “I have no choice but to pay 100% of my DirecTV bill with 50% of the revenue that I used to have,” he says.
2. The website problem.
While small business owners are trying to lure in customers like never before, they’re battling tech headaches to find those customers. Billy Can Can’s three-course take-out menus are a good example: “Every time we change it, we have to change it on our website, Toast, Caviar, Doordash, etc. Then we also need to post the menus on social media and circulate them to the neighborhood,” says restaurateur Taryn Anderson. The general manager of the Victory Park restaurant, Abe Bedell, says every change means updates in six places as often as two times a week.
3. Smaller deliveries add up.
Kate Weiser makes her chocolates in a kitchen in Trinity Groves, then delivers them to the Kate Weiser Chocolate shops at NorthPark Center and the Shops at Clearfork in Fort Worth. That’s not new. What is new is a reduction in the number of chocolates and an increase in the frequency of deliveries to be sure chocolate stays fresh at the satellite stores. “We used to be able to load up a delivery with bulk boxes and not have to worry about them sitting longer than a week,” she says. “Because foot traffic is so slow right now, we have to make several super tiny deliveries to each store throughout the week.” She can’t afford delivery drivers right now, so she’s the de facto deliverer. As in: “It’s just me in my little Mini Cooper, driving all over D-FW.”
4. Higher-quality food is even more expensive right now.
Bullion, a French restaurant in downtown Dallas, has remained closed since March. So on July 1, its parent company Labora Group launched a new venture called BTG, which stands for Bullion To Go. It’s a high-end, contactless delivery service with grocery items, cocktail kits and wine. While the cost of groceries have been increasing, Labora Group VP of Hospitality Jason Cotton says BTG’s ultra-high-quality groceries, like air-chilled chicken, are more expensive than ever. It doesn’t help that BTG is purchasing much smaller quantities than, say, Whole Foods. “I could abolish the standard and find a cheaper chicken, for sure,” he says. “But to keep true to the quality the guest expects, I don’t have the ability of other options.” Cotton sells air-chilled chicken for $7.50 a pound after purchasing it for $7.25 a pound: That’s a teeny 3.4% profit, when most restaurants strive to make 25% to 35% gross profit margins. Interestingly, he believes the problem will slowly get better, as his sources are “scrambling” to get smaller amounts of high-quality food. “A month from now, there’ll be a ton more [chicken purveyors] out there,” he says.
5. When cans can’t.
About two-thirds of the breweries in Texas are closed right now because of Gov. Abbott’s bar shutdown order, says Caroline Wallace, deputy director of the Texas Craft Brewers Guild. One of the ways shuttered breweries can make money is by selling beer to go, often in 32-ounce aluminum cans called crowlers or in typical 12-ounce cans. But an aluminum can shortage threatens these already-struggling breweries. “We’re having to transfer beer previously kegged back into tanks and then canning that,” says Bobby Mullins, founder, CEO and head brewer at Armadillo Ale Works in Denton. If their access to aluminum cans dries up, they’re in trouble.
6. No singing.
Many restaurants aren’t hiring live musicians, which helps bring in extra revenue. Lockhart Smokehouse in Dallas and Plano used to host weekly concerts but nixed those plans once medical professionals revealed that singing is a way COVID-19 is transmitted. Plus, Lockhart’s co-owners don’t want people congregating, another no-no. “People would hang out and have a good time and drink beer,” says co-owner Jill Grobowsky Bergus of the olden days. “We do miss that.”
7. No dancing.
Salsa-dancing nights are canceled temporarily at Blue Mesa Grill in Addison. Baron isn’t taking any chances: “TABC told us if we tried to do it, they’ll take our liquor license away,” she says. “It’s hard enough to do business without the authorities threatening you.” Pre-pandemic, weekly salsa nights encouraged some customers to come early for dinner, then stay for several hours and order drinks while they danced.
8. Beer down the drain.
When restaurant dining rooms and bars closed for the first time in March, many ended up pouring out any remaining keg beer. Bar owners experienced déjà vu in late June, when bars were shuttered once more. There’s a domino affect here, Wallace says: Whether a keg was still at a brewery, picked up by a distributor or inside a restaurant, they all suffer when purchased products become unusable. Throwing away beer is an emotional task, too. “It’s like a chef sending out food they’re not proud of,” Wallace says. “Brewers have a real obligation or conundrum when they have a beer that’s maybe a few weeks past its prime. A lot of brewers bite the bullet and dump it.”
9. Third-party delivery takes a bite out of profits.
Restaurants forfeit about 25% of each sale when customers use UberEats, Grubhub and some other third-party delivery services. Baron calls it “a losing proposition, at our price point.” She and other restaurateurs are trying to convince customers to order directly from the restaurant, cutting out the middle man. As delivery becomes ever more important to consumers, we’ll likely see more restaurateurs doing this.
