Diners are returning to restaurants and bars, with sales up nearly 9% in June from the same month in 2019, before the pandemic, Census figures show. Some of the last remaining states with Covid-19-related indoor-dining restrictions——including Washington, New Mexico and Oregon——lifted them in recent weeks.
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The highly contagious Covid-19 Delta variant threatens to hurt restaurants’ ability to completely return to normal, however. Some localities this month have brought back mask guidelines for the public regardless of diners’ vaccination status.
Here is what to expect if you are a diner, worker or owner.
If you are a diner:
How’s the seating situation?
Still limited in many cases even without capacity restrictions in most states. States have largely allowed restaurants to return to normal numbers of customers, but some localities still require businesses to space out diners by at least three feet. Others still ban seating at bars to prevent crowding.
Many restaurants are still promoting online delivery and pickup, and those sales remain higher than pre-pandemic levels, according to market-research firm NPD Group Inc. Outdoor dining was another popular addition to restaurants last year, but fewer businesses are able to keep offering it because of a lack of space, local regulations, weather and cost, according to listing site Yelp Inc.
How has service changed?
It will be slower in most cases. Hours have become more restricted at many restaurants. Restaurants have struggled to hire enough workers to fully respond to more demand from people dining out.
Cinnamon Kelly, 48 years old, of Villas, N.J., who owns a vacation-rental business, said she had noticed slower service as jobs typically filled by students have remained open.
“We have run into a few of our favorite restaurants being closed on a day we wanted to dine out,” Ms. Kelly said. “It’s a little bit of a bummer.”
More online reviews of restaurants in recent months have mentioned “understaffed” as one of the complaints, according to restaurant-analytics firm Black Box Intelligence.
Customers should also get used to slimmer menus. Many restaurants removed items during the pandemic to simplify operations and aren’t planning to bring them all back.
What about masks?
The rules are still shifting. The Delta variant is leading some officials to tighten mask policy again. Los Angeles County this month began requiring the public wear facial coverings when doing business indoors regardless of vaccination status. A cluster of Bay Area counties, Las Vegas and Austin, Texas, are urging people to do the same.
Andy Wiederhorn, CEO of Los Angeles-based FAT Brands Inc. group of restaurant chains, said the county’s new mask guidance conflicted with federal rules, creating confusion. “You have the CDC and L.A. County saying different things,” Mr. Wiederhorn said.
Eight states, including New York and Connecticut, require the unvaccinated to wear masks inside most public places, such as restaurants, according to AARP.
If you are a worker:
Do you need to be vaccinated?
Not according to federal rules. However, some restaurants have strongly encouraged inoculations and granted employees paid time off to get vaccinated.
Chicago-based Fifty/50 Restaurant Group this spring began mandating its workers get vaccinated. The rule has left the 15-restaurant company with a shortage in staff at times, but it has helped its employees feel safer, co-founder Scott Weiner said.
How about masks at work?
The Occupational Safety and Health Administration last month said most workers who are vaccinated can forgo masks. Those who haven’t been inoculated should keep wearing a well-fitted face covering, particularly for public-facing roles like some restaurant jobs, OSHA said. The federal government also suggests that employers shift unvaccinated workers away from payment terminals and where customers congregate, and work during off-peak hours.
How has the work changed?
Fast-food restaurants have less staff compared with pre-pandemic levels, and sit-down establishments are particularly short of servers, according to Black Box. Some restaurant workers moved into new sectors after being laid off last year, while others don’t want to work in public-facing roles or are caring for family members, surveys show.
Pay is going up, as are benefits. Companies such as McDonald’s Corp. and Chipotle Mexican Grill Inc. are offering college stipends and amenities such as emergency child care to attract and retain employees. But more needs to be done to make restaurant jobs attractive to workers, including making pay more equitable between those receiving tips and kitchen workers, said New York restaurateur and Shake Shack Inc. founder Danny Meyer.
“This moment presents our industry with an amazing opportunity to evolve, not only into a fun place to work but also one where you can earn a good living while you’re at it,” Mr. Meyer said.
If you are an owner:
What’s the outlook for the restaurant business?
Things are looking up, but recovery differs depending on the U.S. region and the kind of clientele a restaurant serves. Restaurants in the Midwest regained their sales earlier, while those in the Northeast have had a slower rebound, according to figures from Earnest Research, a data analytics company that tracks card spending.
Chipotle said the company’s restaurants are starting to have an influx of lunch goers again, giving the chain confidence that people are eating out more as they resume routines. “It’s usually an individual that, frankly, we hadn’t seen in a while,” CEO Brian Niccol said about the return of in-person diners.
What are the new challenges?
Food and labor costs are climbing, and they are squeezing profit. U.S. inflation rose in June at the fastest pace in 13 years, according to the Labor Department. Commodity costs are also climbing, with Domino’s Pizza Inc. saying the percentage of revenue going to pay for food is rising this year. It also is planning to raise wages as it faces one of the most challenging hiring situations in years, CEO Ritch Allison said. “Wages are only going in one direction,” Mr. Allison said.
Of 2,500 operators recently surveyed by the National Restaurant Association, 76% said their profit was lower than pre-pandemic levels and their costs were higher.
Some operators said they are passing along some of those costs to customers, with consumer prices 4% higher at restaurants in June compared with the same month last year, according to the Labor Department. But many companies say they are shouldering increasing costs and may need to raise prices further. “There’s an opportunity to adjust pricing in an appropriate way,” said Steven Benrubi, chief financial officer of Japanese-cuisine chain Kura Sushi USA Inc.
Is there help?
Not as much as restaurants hoped. Congress in March passed legislation authorizing $29 billion in grants for restaurants and bars, and more than 278,000 establishments deemed eligible applied. The money ran out quickly, with 177,000 restaurants not receiving an award. Additionally, around 3,000 restaurants had their grant canceled following lawsuits that stopped the government from distributing funding based on priorities such as race, according to the Small Business Administration.
Restaurants are now lobbying Congress to allocate more funding to the program. Members of Congress have introduced two different bills for allocating $60 billion in additional spending.
Write to Heather Haddon at heather.haddon@wsj.com
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