Restaurants have been hit badly by the novel coronavirus pandemic, and in ways diners may not even realize. Even as restaurants whose dining rooms have closed try to pivot to delivery or find other creative ways to stay afloat (selling off their wine cellars, turning themselves into corner stores), in many cases, it won’t be enough. There’s rent due to landlords, employee benefits to pay, suppliers who rely on you, and countless other factors.
John deBary, co-founder and board president of the Restaurant Workers’ Community Foundation (RWCF), and chef Pim Techamuanvivit, owner of acclaimed Thai restaurants Kin Khao and Nari in San Francisco, as well as Nahm in Bangkok, explained just a few reasons it’s so hard for restaurants to survive right now, in a conversation with Hillary Dixler Canavan for our Eater @ Home event series.
Hillary Dixler Canavan, restaurant editor: “I think one thing the average diner doesn’t totally understand is just how precarious any given restaurant’s financials are, and likewise how precarious many restaurant workers’ financials are.”
Pim Techamuanvivit: “Just because we’re closed doesn’t mean that some of the expenses can stop. Rent continues; you’re still paying electricity and water. If you’re supporting your employees’ health insurance and you choose to continue... that’s tens of thousands a month. Also, we have other bills that are coming due; because the way that we buy products, we get a certain number of weeks we can pay our bill and it’s a rolling kind of thing. You're just trying to stay ahead of the bills and you need to continue to have income. Once the income stops, a lot of the expenses you incurred don’t stop. So it’s a matter of how much reserve you have.”
Dixler Canavan: “Generally speaking, restaurants are not sitting on piles of cash. It’s a business model that’s built to operate on very slim margins to sustain business.”
John deBary: “One of six restaurant workers are living in poverty, and up to forty percent are at or near the poverty level. So there’s no room to go. So much in the same way that restaurants are operating on slim margins, many, many restaurant workers are operating not paycheck to paycheck but really shift to shift. And a couple of bad nights can really make a difference for a lot of people.”
Techamuanvivit: “A lot of the hourly workers especially work not just paycheck to paycheck, but shift to shift; and I can’t imagine, if you don’t have an income coming in or you don’t have any tipping coming in at all, how you’re supposed to also find money to put yourself on COBRA... that doesn’t make any sense.”
deBary: “RWCF has gotten so many messages from people who are really desperately looking for help — and they’d already had a slow period up until the [restaurant] closures.”
Techamuanvivit: “We made a pivot very quickly to doing to-go business — but as much as we see support from our regulars and our friends, it only goes so far... The reason we’re still continuing to do takeaway, it’s not because we’re making money — it’s so we can continue to support our supplies, the farmers we’ve been working with. Because if we stop using all of the products, where are they going to go? And then at least we have some cash going, and I can pay for people’s insurance and help pay for some of the bills and not have zero income at all.”
Dixler Canavan: “A separate worry that I have is that this will push even more restaurants into business models with fewer employees in general, in part because having a lower payroll will help them survive when they reopen.”
Techamuanvivit: “We are trying to work out [rent] with our landlord, but there’s no clear solution yet. Even if there’s some sort of deferment, it’s still something that we’re going to be stuck paying when we re-open, and business is not going to be the same when we re-open; it’s going to take quite a long time to build momentum again. It’s a matter of: Can we continue to pay rent, and at the same rate that we were paying before?
Restaurants can’t cook our way out of this. We can’t go with a hat in hand, begging to our supporters, to help us through this, even though we appreciate the help — and every little bit helps.”
Watch the full Eater Talk below and check out upcoming virtual events: