Is this as good as it gets?
It has been well over a month since restaurants reopened their doors for both indoor and outdoor dining in Massachusetts, and that question is on seemingly every restaurateur’s mind. With no clear end of the pandemic in sight, debts mounting, and federal aid running out, the approaching end of summer is deepening the survivalist instincts restaurateurs have developed in recent weeks.
“What we’re hearing from other people in the industry is the question: How long are you going to be able to survive, and is now the time that I just cut bait?” said Nia Grace, owner of Darryl’s Corner Bar & Kitchen in the South End. “Seasoned restaurants, they can go the long haul. But if you’re not planning for the next 12 to 18 months of what your business is going to do with COVID, that’s just irresponsible at this point.”
Kristin Canty opened Woods Hill Pier 4 in the Seaport in November and had been looking forward to summer. But even with an expanded patio overlooking the water, she’s doing about a third of the business she had hoped for at this time of year.
“I’m nervous. We’re wondering if we could get shut down again,” she said. “We’re in a lot of debt, and it seriously hurt our cash flow. For my restaurants, it’s completely weather-dependent right now. That’s why we’re nervous about going into the fall.”
Since the pandemic started, there has been a steady cadence of restaurant closures in the state. And industry experts predict that unless health conditions improve substantially or the federal government extends the Paycheck Protection Program, the end of the outdoor dining season may force more restaurants to fold up their tents.
“The fall is going to be the great coming of justice to the restaurant business,” said Stephen Zagor, who teaches food entrepreneurship at Columbia Business School. “When the PPP runs out and the bad weather starts to turn, if the pandemic is still simmering, there will be a point that I refer to as the ‘return on aggravation’ that many restaurant owners will face: How much aggravation will you put up with to get out of this mess? . . . This is going to happen in the fall, I’m afraid, in an astronomical way.”
Erik Hynes, who owns several South Shore restaurants and is one of the leaders of the local industry coalition MA Restaurant & Jobs Group, which had been pushing Governor Charlie Baker to reopen restaurants on a quicker timetable, said that many of the group’s lobbying efforts have slowed in the past few weeks as members focus on running their businesses.
“Owners are really kind of laser-focused on how many tables can I fit under this tent, but less about the overarching problems,” Hynes said.
He worries that many of his colleagues are so wrapped up in day-to-day operations that they don’t have the time or energy to campaign for the additional government action that may be their last bulwark against closing their businesses.
“The mentality of a lot of owners is that we’re whistling past the graveyard,” he said.
The data are showing that restaurants’ revenue growth leveled off at the beginning of July. Paytronix, a Newton software company that manages loyalty programs for larger chains, tracked about a 0.5 percent increase in daily sales from the end of March, when restaurants were able to restart takeout orders. But more recently, Lee Barnes, head of data insights for the company, said business has plateaued.
“As of July 4 there hasn’t really been any progress; we’ve sort of seen it flat-lining,” Barnes said. “Our clients are down 25 to 30 percent pre-pandemic, and most are stuck in that mode.”
And those chain restaurants have both investors and capital to keep them afloat. Statewide, a survey from MassInc Polling Group released July 23 found that 70 percent of restaurants reported revenue had dropped by half or more since the pandemic started, and 40 percent said they had missed rent payments.
“We don’t have a patio. . . . And with each month that goes by our rent will add up, our debt will grow, our team of 33 will remain unemployed, and the likelihood of us ever serving a customer again will diminish,” Daniel Lanigan, the chief executive of Lord Hobo Brewing Co., wrote in a Facebook post about his Cambridge bar this week.
“And we are not alone. This is the conundrum facing tens of thousands of other restaurants nationwide. The few that are open now are primarily relying on temporary outside seating. But what will happen to them in November when the temperature drops? The restaurant industry is in BIG trouble. . . . Without real leadership, guidance, and a long term plan, the industry that so many of us have dedicated our lives to, will be destroyed as we know it. Winter Is Coming.”
For Bob Luz, president of the Massachusetts Restaurant Association, remaining optimistic is part of the job description.
“If we get lucky and it’s not a terribly cold November, the dining experience” could continue outdoors, he said.
Luz pointed out the continuing federal and state efforts to offer more relief to the industry, including another round of Paycheck Protection Program loans. In Massachusetts, legislative leaders are considering a cap on third-party delivery fees and other measures as well as a special fund just for restaurants.
“I do think there’s some more legislative help that will be coming,” he said. But Luz also acknowledged it may come too late for many owners, particularly given the public’s current comfort level with indoor dining, which remains low and has spurred industry efforts to change the narrative. “I think there’s a tremendous challenge continuing ahead for restaurants,” he said.
Still, some are optimistic. Suburban restaurants and those in the hearts of residential neighborhoods are doing better than those in downtowns, Luz said.
That’s the case with Joel Garcia, who owns two outposts of Angela’s Cafe in East Boston. He has been bolstered by PPP loans and steady business from nearby residents and has managed to break even over the past few months without needing to open up patio seating, which bodes well for him come fall. “I think we’re going to be able to keep going,” he said.
Andy Husbands is bullish, breaking ground on a Harvard Square outpost of his Smoke Shop barbecue restaurants last week. While he’s concerned about outdoor dining declining in the fall, he’s hopeful an uptick in catering and new revenue streams like cocktails-to-go will keep the money coming in.
“I’m sure there are some people putting their head in the sand,” he said. “My style is put your head down and work on a strategy to stay open and survive.”
Canty is looking ahead with hope, as well. She has relatives who own restaurants in Switzerland, where patrons are used to snuggling up in blankets and dining al fresco well into the winter. She is already pricing fire pits and hopes Bostonians might be willing to adopt such a European approach.
“I am worried about the cold weather and any bad weather,” she said recently. “But right now we’ve been loving July.”