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Nice Q&A: Famed chef David Chang discusses the restaurant business in coronavirus times and beyond.
David Chang Isn’t Sure the Restaurant Industry Will Survive Covid-19
There’s so many people that work for me whom I am incredibly concerned about. Where are they going to get their next meal? Do they have health care coverage? How are they going to pay their bills? But this is the way I’ve been weirdly internalizing it: It’s as if aliens came from outer space and decided to totally destroy restaurants. I wouldn’t be like, I can’t believe I didn’t see this coming. In some way coronavirus is an invisible enemy that we could not have anticipated. No one could have. https://rgnmedia.com/2020/04/01/davi...ew-york-times/
I would think that among the live entertainment venues restaurants would be among the first to come back. There might be a different price structure to accommodate less tables but they might have an easier time adapting than sports, theatres and travel
Restaurants run on razor slim margins. Five cents on the dollar for the very best run restaurants.
They absolutely cannot survive on 50% or 25% occupancy rates nor can they survive on takeout only.
Your favorite restaurants will start to close their doors and don't kid yourselves thinking it is just the small mom and pop locations.
They are all high risk.
Me too. I am really worried about how many will come back. And so many here just opened this year - so they didn’t have time to build a following.
There is one I think that is expanding. They already had thriving takeout - so much so they opened a takeout / delivery app location. And now they are delivering to other cities. If I recall - the takeout only location was selling 3-4x the actual restaurant.
One restaurant I like opened a second restaurant literally the week before we started sheltering in place. I think takeout is going well. So my fingers are crossed both will remain. He had already reformatted his restaurant 2 years ago to go fast casual and accommodate takeout more. While he did have to do some layoffs his overhead was much lower than the previous restaurant.
We are going to lose some great restaurants. And if we don’t reopen properly another chunk will be lost as well. The restaurants best positioned to survive are ones that own their buildings and don’t have rent or mortgages to pay. Or ones that had thriving delivery operations. Every other restaurant is at risk now.
Because he opens restaurants in expensive cities that are the epicenter of mass infections. You can't survive doing deliveries alone, it is very costly and not enough volume. Deliveries doesn't do enough because people order less when they have to pay around $7-9 in total delivery fees.
I mentioned in NYC how retail and small business will die there because majority of the customers are workers. Since NYC isn't opening anytime soon the restaurants that depends on business workers and tourists are gonna have to close shop for good and reopen in the future.
Because he opens restaurants in expensive cities that are the epicenter of mass infections. You can't survive doing deliveries alone, it is very costly and not enough volume. Deliveries doesn't do enough because people order less when they have to pay around $7-9 in total delivery fees.
I mentioned in NYC how retail and small business will die there because majority of the customers are workers. Since NYC isn't opening anytime soon the restaurants that depends on business workers and tourists are gonna have to close shop for good and reopen in the future.
No, restaurants everywhere have tiny tiny profit margins. Typically 3-5%. No matter where you are located. It is hard to make a restaurant profitable - because your product has a shelf life. It is really hard to make money as a restaurant, lots of room for error.
Labor costs are huge and demand is unpredictable. You also have a lot of fixed costs. You'll see a lot of closures everywhere.
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