Restaurants face uncertain demand, panicky diners and staff struggles; Some chains and franchises remain divided over indoor dining
The restaurant’s plan to return diners to indoor tables is being settled.
Chains such as McDonald’s Corp. and Chick-fil-A Inc. are slow to reopen their dining rooms, given a Delta-driven surge in Covid-19 infections. Other restaurants are losing customers again, trying to squeeze more diners into the outdoor patio while the weather still allows.
Laurie Torres, owner of Mallorca in downtown Cleveland, said sales at her Spanish-themed restaurant had spiked earlier in the summer from the pandemic, but fell again last month as diners panicked. Mallorca brought back the interior dividers and reattached tables to help customers feel comfortable inside, but Ms Torres said she expected the fall to be tough.
“The sand is shaking again,” said Ms Torres, which is closing early on the weekend and closing completely on Monday due to uncertain demand and staff struggles. “It’s so hard to predict.”
The resurgence of Covid-19 is causing whiplash for restaurants, which have been battling pandemic-related disruptions for a year and a half. Data from restaurant analytics firm Black Box Intelligence shows a steady decline in summer sales over the past five weeks.
Bars and restaurants lost 41,500 jobs in August, the biggest monthly decline for any single sector, according to Labor Department data released earlier this month. It was the food-service industry’s first monthly decline since December.
The Delta version has reversed some of the reopening momentum seen earlier in the summer. The rising number of Covid-19 cases in recent weeks has led to canceled concerts, postponed trips and the return of masked mandates.
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Restaurants flocked to the summer with optimism as Covid-19 related restrictions were eased, with sales soaring. Now, nearly one in five Americans say they no longer go to restaurants, and according to a national survey of 1,000 adults by the National Restaurant Association last month, 9% have canceled existing plans to eat out in recent weeks. have make.
“I’m going to stay home for a while,” said Ellen Corey, 64, a North Carolina resident who had been eating out and traveling for about four months after being vaccinated, but has since stopped.
Shares of casual-dining restaurant chains, which rely more on dine-in sales than fast-food companies, have plummeted in recent weeks. Chilean owner Brinker International Inc. said last month that Delta had begun to reduce sales, and that its shares have fallen 16% since early June. In the same period Dave & Buster Entertainment Inc. Shares of Dine Brands Global Inc., the owner of Applebee’s, are down 18% and Applebee’s shares are down 14%.
McDonald’s prepares to close dining rooms again
Drive-thru and to-go sales helped the fast-food chain weather last year. As the transition eased earlier this year, many chains and owners wrestled to reopen their dining rooms. Fast-food companies have generally sought to restart indoor dining when allowed, but data from the market-research firm NPD Group shows that the number of customers dining inside them is higher than pre-pandemic. remains below the level.
Many operators have struggled to hire enough workers this year, and some have argued that dedicating employees to sit-down service isn’t justified when indoor business sales remain much slower than sales. . Wendy’s company told investors last month that some of its restaurants were closing their dining rooms for parts of the day due to staff shortages, and it backed operators’ decisions to close indoor dining if the need arose.
At Chick-fil-A, where drive-thru lines at restaurants have stretched across parking lots during the pandemic, the Atlanta-based company has allowed owners to keep the dining room closed if they wish. Last month, the chain extended that option until January out of security concerns, and most Chick-fil-A dining rooms remain closed, a spokesperson for the company said.
Many Chick-fil-A venues have closed their dining rooms due to labor shortages.
Dining room policies have at times divided companies and restaurant owners.
The National Owners Association, a group of McDonald’s franchisees, told the company in May that some franchisees had felt pressure by local McDonald’s corporate representatives to reopen their dining rooms, according to an email the group had sent to its members. .
“It’s when you’re ready, not a countdown timer,” a McDonald’s franchise representative wrote in the email.
McDonald’s said the chain has worked closely with franchisees to put the well-being of restaurant employees at the forefront of their decision-making. Mark Salebra, president of the National Franchise Leadership Alliance, the official McDonald’s owners’ group, said restaurant operators are working with McDonald’s when it comes to opening and closing dining rooms in response to the local cases count.
According to messages from McDonald’s US owners, the company is asking franchisees to offer sales only in areas with high concentrations of COVID-19 cases. The company said in an email to owners late last month, where daily cases are more than 250 per 100,000 people on an average of three weeks, restaurants should only consider placing to-go orders.
“Consumers have become more concerned as the latest outbreak worsens,” McDonald’s said in a separate message to owners in late August. “We must reaffirm and reaffirm our commitment to security.”
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Franchisees are also divided on their approach to dining rooms. Some McDonald’s franchisees said they have voluntarily closed dining rooms in view of rising cases. Another McDonald’s owner said he’s holding off on closing his dining room, saying competitors stay open and only move to let go, running the risk of losing sales.
For many independent sit-down restaurants, keeping customers in the dining room remains a necessity. Some owners are now troubled by the debt they accrued since the start of the pandemic and said they need to sell.
Phil Simonson, owner of Chocolate Lab restaurant and bar in Denver, got into the pandemic without any debt, but now bears $100,000 in loans taken to keep his business afloat. He is paying the bills but not reducing his debt, Mr Simonson said.
“Keeping our dining area open and safe is my top priority,” said Mr. Simonson. “It’s definitely a challenge.”