Can NYC Restaurants Survive the Coronavirus Pandemic?
Some of the city’s top chefs weigh in.
Not counting staff, food costs, or any sense of when she’ll serve her next meal (or pay herself), it costs Amanda Cohen $30,000 per month to run a restaurant in New York City. Thanks to rent, insurance and utilities, the five-figure overhead on the chef-owner’s Lower East Side vegan sanctuary, Dirt Candy, is an unfathomable, but very real, cost of running a restaurant in the Big Apple. An industry that likely will not exist as we know it after the COVID-19 pandemic.
In the past few weeks, Cohen, like thousands of restaurateurs across New York, laid off her staff. While her servers are paid $25 per hour (the restaurant doesn’t accept tips), and receive 70% of their salaries from unemployment, Cohen’s been experiencing blowback from the public, and has received critical emails asking how she could lay off her entire team. “I didn't really have much choice,” she says. “Everybody understood, there’s nothing we can do… And I have no idea what’s about to happen.” If she has to pay that $30,000 next month, plus taxes from first quarter sales, “there’s not enough money in the bank,” for Cohen, who is diligent about paying bills to avoid debt, to reopen. Rent and utilities would have to be forgiven and “a huge bailout,” would be necessary.
Running a Restaurant During COVID-19
Though restaurants can still operate via takeout and delivery in New York City, staffing a kitchen encourages the use of public transportation, putting workers at risk. Most restaurants, like Cohen’s, which serve only tasting menus, were not designed for takeout, and the marginal profits from catering-style dishes may barely cover operating costs. Her larger competitors, including restaurant groups run by major players like Andrew Carmellini, Danny Meyer and David Chang, have shuttered their restaurants indefinitely, organizing staff relief funds for the thousands of hourly employees who are now out of work.
Uchu Hospitality (which includes the very affordable Sushi on Jones and very exclusive omakase spot, Uchu), founder Derek Feldman says this crisis counters everything intrinsic to the industry. “All we want to do as hospitality owners and restaurateurs is bring people together and this virus is the exact opposite of that, he says.” He’s keeping his casual restaurant open for takeout, and selling vouchers that allow customers to redeem them for a welcome drink when restaurants reopen, but his solution for the time being aligns with the CDC: Stay home.
“I can't stress enough how important it is for everyone to do their part collectively and stay home. Until we see the number of cases go down, the hospitality industry will continue to suffer,” he says.
Encouraging clients to stay home, takeout from top-rated restaurants has become a way for restaurants to stay relevant, and in business. Altamarea Group, which includes chef Michael White’s acclaimed restaurants like Osteria Morini and Marea are “working with a skeleton crew” after laying off almost the entire workforce, says Ahmass Fakahany, Altamarea Group’s Founder and CEO.
“With no timeline or set relief plan, we had no choice,” he says of the decision. Management is washing dishes and doing whatever it takes to hold it together to “give our few remaining employees some purpose and to still serve clients and communities.” A new Marea At Home program is set to launch this week, bringing the Michelin-star cuisine into the homes of Manhattanites, but will that be enough to sustain the restaurant group?
Daniel Boulud, who runs the Dinex Group restaurant empire and a catering company, knows the challenges of alternate types of food service firsthand. “Catering will never make up [restaurant] revenue, it’s more a question of if anyone wishes to work, can we afford something?” Boulud says. Not wanting to put his team at risk of contracting the illness, two weeks ago Boulud sent his staff home with all the ingredients they could carry, and donated the excess food to City Harvest and CityMeals on Wheels.
While he would have considered staying open, a letter from the Department of Health sharing that the Director of Port Authority (who tested positive for COVID-19) had dined at a Boulud restaurant pushed the chef to closing. “I was very worried, but this is best for the community,” he says, optimistic that Dinex can bounce back. “If we close for two weeks, it’s not dramatic. If we close for two months, it’s very dramatic. We have to get organized.”
Staff will be paid for two weeks and for sick days, and go on unemployment until Boulud decides on next steps, perhaps curbside service or delivery from one location, similar options to what Cohen is considering, to create jobs. “This industry is built on people who work very hard, but live paycheck to paycheck.” Boulud says. “A city like New York is a struggle already in normal times, so imagine in this time how hard it is.” He’s working on creating an emergency fund for staff. Like many other chefs and owners, he wants to see the government increase unemployment wages and benefits.
Why Restaurants Need Government Support to Survive
While consumers are helping to support restaurants by purchasing gift cards and dining bonds, as well as swag and nonperishable inventory, individuals aren’t going to fix this crisis. “I’m so touched that so many of my guests want to do that, but I don’t know if there’s going to be a restaurant to return to, and I’d need more gift certificates than I could ask for,” Cohen says. “The bumps of money will help, but they’re bandaids, the nicest Hello Kitty bandaids on a bigger problem. If I reopen, getting inundated with gift certificates isn’t going to help. I need to really make money. The best thing I can say is be there for us when we reopen. We’re going to need so much support to get back up to where we were.”
Chefs and restaurateurs agree that the government needs to help the industry. In the past three years, escalation of costs, wages and taxes have already put undue burden on restaurants as small businesses, and forced closures. The COVID-19 pandemic would act as a final blow to an already unstable system. “I’m pretty upset, because as an industry, we kind of let this happen,” Cohen says. “We’ve kept prices down, we’ve kept [staff] on the tipping system, and this has to change. We have an industry that doesn’t have health insurance. I barely make a living.”
“We’re such an important part of NYC and America, but we’re not particularly unified. Small business owners don't have a big enough voice,” says Wylie Dufresne, who closed his Williamsburg bakery, Du’s Donuts, shortly after his wholesale customers stopped placing orders in mid-March. ”The landscape is forever altered. Massive numbers of small restaurants are going to be completely obliterated, never to return. We’re going to lose a tremendous amount of our restaurant community, the small businesses that make New York such a wonderful place.”
With the nation’s economic future so uncertain, Dufresne said he didn’t feel right asking consumers for help. “It has to come from the government: local, state, federal. Because how can I in good conscience ask anyone concerned with their future to spend $500 on gift cards at five different restaurants?”
He’s heartened by the grassroots support he’s seen circulating online, but simultaneously terrified that the voices of the small business owners will go unheard. With majorly influential and knowledgeable voices (Danny Meyer, David Chang) seemingly ignored by the government, how can restaurants even hope for relief or support?
“It’s not totally clear this won’t be totally catastrophic,” Dufresne says. “As restaurateurs, we have a hard time wrapping our heads around situations that can’t be fixed by outworking. That’s our thing. It runs counter to our DNA, to everything we believe in and are willing to do. We’re willing to do anything except the one thing that’s best, which is to go home. We’re just not wired like that.”
A new organization, The Independent Restaurant Coalition (IRC), is working on recouping the $880 billion American revenue, via grassroots lobbying and petitions. “The industry has been devastated. We need practical and organized relief that quickly gets to the small restaurant businesses,” Fakahany says. With over nine million jobs at stake, big name chefs, like Wolfgang Puck, Nancy Silverton and many more, are organizing to lobby and influence the government and the public to get on the industry’s side.
Looking Forward to Making Reservations
Predicting an era when the restaurant can finally open again, Boulud expects a “new beginning” in which hours, menu size and price may drastically change for high-end restaurants like his, with consumers and companies struggling financially.
Dining out may become a special treat, rather than an everyday occurrence. Brunch may be an annual, rather than a weekly affair. Your favorite cocktail spot may become a Duane Reade. Cohen, who built her tasting menu to be accessible (and sacrificed higher profits for pleasing guests), knows that if and when she reopens, prices will have to increase. She’s also worried about producers, who may also go out of business without regular orders from restaurants. There’s a lot to speculate over, but not much to do, except sign grassroots petitions and try to support local restaurants in any way you can.
“One thing we’re not going to lose is our talent, our ambition, and our staff who are there waiting,” says Boulud. “Together we will prevail and start again strong.”
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