Your local restaurant (desperately) needs support.
The pandemic killed more than 10% of restaurants nationwide; many independent restaurants remain on 'life support' while responding to the 'new demand.'
Last week we passed the fourth anniversary of the COVID-19 lockdown, when the world became a mask-filled place no one recognized and myriad businesses ground their operations to a halt. Sadly, despite many areas of the economy returning to pre-COVID-19 levels, most local restaurants—who bore the brunt of the shutdown—remain at great risk of closing permanently.
A recent piece in The Wall Street Journal titled “The Skyrocketing Costs Driving Cheeseburger Prices Up—and Restaurant Owners Out” drove this point home in scary fashion:
“Independent restaurants are on financial life support, owners say, squeezed between escalating payroll costs and diners’ dwindling tolerance for ever-higher checks. Wages for waitstaff, table bussers and line cooks will grow more expensive for many eateries this year, with 22 states in January raising the minimum wage for hourly workers.”
The pandemic forever changed the dining experience, and not necessarily for the better. Hiring, always a challenge in the tough, competitive restaurant business, is now a Herculean effort with churn at astronomical levels. Add in the increased costs for labor, food, supplies, and rent, and you have a combination that’s proven fatal across the country.
It’s estimated that more than more than 10% (or 70,000) restaurants have closed since 2019, with the industry going from more than 700,000 to around 630,000. Independent restaurants, however, have been hit the hardest, according the the WSJ article, with nearly 5,000 more independent restaurants closing than opening through November 2023.
If you’re of the mind that most of the restaurants you now frequent have significantly higher prices and often poorer customer service, it’s not a figment of your imagination. Prices for everything from condiments to meat, cheese, and bread are now up over 100% in many cases. For example, one restaurant in North Carolina is paying nearly 300% more for eggs and 132% for mustard packets.[1]
But labor remains the biggest bugaboo for independent chains, as the issue shows up not just in the bottom line, but in service as well. Across the country, restaurant owners lament the challenge of finding and keeping workers, many of whom—having experienced burn out during the pandemic—are now splitting time in the gig economy as, say, Uber drivers or Lyft drivers.
Those restaurants who can manage churn and hang on to staff are doing so by paying much higher hourly rates and making due with fewer staff members overall. All combined, higher costs and staff challenges can create a restaurant experience at the customer level that’s spotty at best.
For example, I’ve noticed several big changes at restaurants since the pandemic:
Poorer food quality, likely owing to owners going with cheaper options from distributors,
Below average customer service, even from places well-known for excellent service, and
Significantly higher prices. It’s unlikely that we’ll see significant changes in these areas in the near future, if ever.
Takeout is here to stay
The biggest change, though, for restaurant owners and customers is the emphasis on takeout, which used to be a fraction of overall service but is now 80% at some local businesses.
How this takes shape: More of the staff has to be used to prepare takeout orders, leading to much longer waits—or food that is less fresh—for dine-in patrons.
It’s not uncommon to visit restaurants and see two people waiting tables but witness a small army of folks packaging to-go orders. On more than one occasion I’ve experienced 1 ½-hour wait times for dine-in, which prompted a conversation with the manager.
“We’re inundated with to-go orders,” one manager at an independent restaurant said, “while, as you can see we have few servers and even fewer customers. We’re simply responding to the new demand.”
Unfortunately, the dine-in experience at many restaurants is now a huge drop off from what it was in years past. Personally, as someone who seldom eats out during the best of times but who ate out more than ever since the pandemic to help local restaurants, I’m now ordering to-go almost exclusively when eating alone.
How you can help local restaurants
Like me, you’re likely willing to invest in the success of local restaurants. Here’s a few things you can do to help out:
Continue to eat out, and consider doing so during the less busy times of the week—typically Monday through Wednesday,
Offer feedback when something is amiss or warrants comment,
Tip generously, even on to-go orders,
Share great restaurant experiences with friends,
Leave a review via Google or Yelp,
Offer grace: Understand that this is a do-or-die time for many independents, most of whom are fighting mightily to continue serving your community.
Interesting stats from the WSJ article
“As a percentage of sales, restaurants rely on labor more than other retail sectors, making the rise in wages particularly draining on profits, according to industry economists. “
“It takes 12 employees to generate every $1 million in restaurant sales versus roughly three employees at grocery, general merchandise and clothing stores, according to analysis by the National Restaurant Association.”
“Independent restaurants are less able to spread out administrative costs and command volume discounts. Labor costs have been rising faster and longer at independent restaurants than in the economy as a whole, with full-service restaurants seeing the biggest increases over the last year, according to an analysis by Gusto, a small-business payroll and benefits provider. “