In the three months since we checked in with merchants on the state of their restaurants during the pandemic, a lot has happened. The global economy saw its worst downturn since the Great Depression. Black Lives Matter became the largest movement ever in U.S. history. Loosened social distancing restrictions at the onset of summer brought on a second spike in COVID-19 cases across the Sun Belt, prompting officials to shut down states yet again.
America’s restaurant industry, already on life support after the first month of the pandemic, remains in a bleak state. The sector has already lost $120 billion thus far, a number projected to double by year’s end. Yelp’s recent Economic Impact Report revealed that 53 percent of restaurants that have shut down at any point during the pandemic are now closed for good. The National Bureau of Economic Research projects that just 15 percent of restaurants will remain in operation by the end of 2020 if the current disruption lasts for just another two months, a certainty at this point. But forced into fight-or-flight mode, restaurateurs have found ways to pivot to alternate business models and capitalize on new opportunities. While the unknown remains a tremendous challenge, some restaurants are actually performing better than ever.
For some restaurant operators, the initial blow of being shut down meant struggling to come to terms both economically and psychologically with being dealt a terrible hand. But after taking the necessary time to regroup, they came back with renewed determination and focus to survive using whatever means they could.
Nelson German, who owns the six-year-old restaurant alaMar and the Afro-Latinx cocktail bar Sobre Mesa in Oakland, closed briefly before resolving to reopen with a new mindset to be as creatively resilient as possible.
Sobre Mesa, which had held its grand opening only nine days prior to the city’s shelter-in-place mandate, had to close for the time being. “I was definitely depressed about closing it,” he said. “Everything had been really smooth: We had a great staff, and people thought the food was fantastic.”
Post-mandate, he was forced to let go of much of his staff at both Sobre Mesa as well as alaMar. But after taking two days to rethink his strategy, German reopened alaMar with a fresh mentality. “It was the mentality: We’re not going to quit. Let’s have the necessary items to feel safe and keep people from getting sick, but let’s keep going. We’ve come this far.”
The first week, the restaurant was making just $600 with Caviar and mobile website orders—far from the amount of revenue alaMar needed to survive. He realized that without the usual dine-in following, he needed to vastly expand the restaurant’s presence on other takeout and delivery platforms. After adding DoorDash and GrubHub, he saw sales not just improve, but continue to increase with every passing week.
Similarly, Anne Le Ziblatt opened her Redwood City restaurant, Nam Brasserie, within a week of the pandemic. “The first week open was the scariest week of my life,” she admitted, despite lifelong experience operating numerous restaurants. “The first day of doing takeout, we did $500, and I thought to myself, ‘Well, that’s not going to work.’”
Yet she had an instinctive sense that she should ride things out. “A lot of people outright shut down, thinking this was going to last a month,” Ziblatt said. “My gut sense was that people were going to eat through all the food they’d spent money stocking up on, and they would get sick of cooking and come out again.”
Ziblatt was right: By week two, Nam was making enough to break even. At the same time, she discovered a surprising opportunity: charitable food donations. Working with the Redwood City Chamber of Commerce, she put together a program that employed restaurants in town to deliver meals to healthcare workers, raising funds both through personal contacts as well as corporate sponsors. The seven-week food delivery program played a key role in helping Nam stay afloat. “We were able to design a program that fit our numbers, because I worked with the Chamber on the program,” she explained. “That gave us time to build our reputation in the community and for people to know us, and now that the program’s over, we’re still able to do well.”
In fact, some restaurants have found, much to their own surprise, that they’re doing better than they ever have before. Despite being open since 2014, alaMar recently broke its all-time sales record. “These past few weeks, with people supporting Black-owned businesses, it’s been nonstop tickets, full and hanging from the printer, on the side of the wall,” German said, adding: “The fact is when you’re open for dine-in, there’s only a certain capacity you can have, but doing takeout, there’s no capacity. It just keeps coming in.”
While a restaurant like alaMar might be more of the exception than the rule during the pandemic, it’s certainly not an outlier. Belcampo Meat Co., a California-based chain of restaurants that specializes in grass-fed meats, has also seen its sales surge in the coronavirus age. “We’ve actually grown significantly,” Belcampo co-founder and CEO Anya Fernald said, also citing the importance of takeout and delivery infrastructure. “I think the reason is that we had really good technology platforms prior to the pandemic—we had really invested in delivery services, while many restaurants were struggling to get on when the pandemic hit.”
Nevertheless, it’s a trying time to operate a restaurant, even for those who’ve found surprise success in takeout for the time being. “Yes, we’re doing well, but the takeout thing is just not us,” German admitted. “For a chef like me, takeout was never a focus, but it has to be now, because of everything going on. We’re going to continue, of course, but I miss seeing guests inside smiling, enjoying their food, and talking to each other.”
For Evan Rich of RT Rotisserie and Rich Table in San Francisco, the continued unknown—of when restrictions will lift, whether they’ll be temporary or permanent, and how willing diners will be to return to dining—remains the most persistent challenge. “You’re trying to make decisions for a week, a month, two months that are going to directly affect you in the future, but there’s just so much unknown,” Rich said.
“The decisions I make directly affect the people we work with. I consider them family. I don’t want to tell them, ‘You can get off unemployment and back to work’ only to say, ‘You’re laid off again.’”
For him, it’s about survival for now, so that restaurants have the opportunity to look ahead and envision the future. For now, Rich Table, his group’s most elevated experience, has been closed for dine-in and replaced with a concept that sells ready-to-heat meals, pantry items, and alcohol. “A restaurant like Rich Table, right now, is just not a thing. Trying to fight to make it happen at this moment is wasting energy,” Rich conceded. “And so it’s thinking, ‘How do we have enough money in the bank so that we can reopen when we have that ability to?’”
“In the future, I definitely see Rich Table coming back, but right now it’s a matter of setting yourself up for that success to come back and be stronger than ever.”
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