When I was still working in Finance in New York City, at the end of a tough day we would regularly find ourselves at the bar at Bobby Van’s on West 44th street. Ronan, our favorite Irish bartender, was quick with a greeting and poured exactly what you needed before you even reached a stool. He was always smiling and positive regardless of the crisis and every day I would ask how he was, and he always said… “livin’ the dream!” It seemed like he had the answer for everything.
I have always felt that the main reason to write this column every month was to share my experiences and offer advice wherever possible to help people in the foodservice industry. When the biggest problem is a downturn in the economy or even a natural disaster like a hurricane, the parameters around the issue are still fairly well contained and finite. Some problems are bigger than others however in most cases we can put our arms around it and try to fix it. Today seems more like living a nightmare than livin’ the dream and no amount of good cheer or single malt scotch can fix it. We are all caught in a perfect storm with nothing but uncertainty and no real end in sight.
The COVID pandemic is burning through the country after months of learning by trial and error how it can be contained. Now that we understand it better, it is mind boggling that the continued surge is largely self-inflicted by some who are defiant naysayers. Science doesn’t care what you believe. The numbers don’t lie, and the virus doesn’t give a crap who you voted for. It is spreading because people are allowing it to happen.
Because of this there are hundreds of thousands of desperate people out of work or with crippled businesses that need to make money to survive. They believe the risk is worth blazing ahead even though they are unsure of the outcome. Unfortunately, it’s not like re-opening after a hurricane or flood because the danger is being carried by the most essential element in our economy – people.
Regardless of your politics – everyone wants to get society back to normal, unfortunately with over 4,000,000 cases and over 170,000 dead in the US the stakes may be far too high and most of the general public not ready to risk it. Florida, Texas, Arizona and California are getting slammed and most of the south is on the same trajectory. The Midwest is starting to light up with infections and death as well. In a free country, people travel and as a result there is spreading and reinfection in many areas. As we add to our understanding of COVID epidemiologists are finding that even in hard hit countries that only 6-10% of the population is establishing antibodies to prevent reinfection and we need to reach 60-70% to achieve “herd immunity”. Even if we are very lucky, a vaccine and more therapeutic drugs won’t be rolled out in sufficient numbers until about a year from now. This means small business owners and laid off employees really need to think ahead to make their next move.
In recently speaking to a number of doctors at Stamford Health in Connecticut, the biggest concern even for a state which has been successful in containment is the double whammy of COVID hitting in the Fall along with Influenza season. They don’t know how these two will play together in the population. Will the second wave of COVID combined with the flu close us down even harder?
Then let’s consider the economic situation as our survival is not just dependent on a solid public health strategy. If in a free market, people can’t or won’t come out to spend enough money for our businesses to survive – or employees can’t keep their jobs – what will you do? The Senate hasn’t passed another stimulus package and the one they have on the table won’t be sufficient to sustain the economy for the next year. The enhanced unemployment benefits lapsed bas GOP lawmakers claim people aren’t looking for work – even though more 45,000,000 have lost their jobs, no one has given any answers as to where they should look.
To add to the pain, the forbearance on evictions has expired and a tsunami of evictions is expected as landlords gear up. This will then kick already beaten people out of their homes and many out of their businesses. People under this much pressure do not have sufficient income cover basic expenses nor enough to dine out. The bankruptcies will escalate as we finish this year and the banks are bracing for it by increasing their cash reserves against defaults. JP Morgan Chase set aside an additional $10.4 billion and Citibank stashed another $5.6 billion. They also realize that “the massive government stimulus and the enhanced unemployment benefits have made it difficult to gain a true picture of future economic health”.
This begs the question for foodservice owners and operators – how will you survive? I saw an interview this morning with Danny Meyer, the owner and founder of the Union Square Restaurant Group and Shake Shack. He emphasized that the pandemic will force the industry to change drastically in order to survive.
The question for those directly on the battlefield – Should you continue the fight and try to hold on or should you put together a well thought out exit strategy?
If you are a foodservice employee, should you follow Ivanka Trump’s erstwhile inane advice and “find something new!”? This from a person who was never hungry or had to find and keep a job in her life. Sorry, I can’t go looking for a job today, I’m on the sidewalk after my eviction! If you are a laid off employee in a restaurant, you should be considering other options.
If you think you are going to rely on government assistance, you are probably fooling yourself. In the past 12 months the budget deficit soared over $3 TRILLION and because of the pandemic stimulus money poured out of the Treasury with deficit spending outpacing GDP since World War II. The current US debt is OVER $25 TRILLION. With every industry in need and the average worker and small business owner on the brink of catastrophe, the government simply cannot prop up everyone. It’s not politics – it’s simple math.
To make matters worse, in many cities we are seeing social unrest and protests that have completely closed sections of cities unrelated to COVID. How do these businesses continue even with restrictions?
The hard facts are that the restaurant business will not be the same for a long time. Face it. It is time to think ahead and ask yourself hard questions. Margins have always been tight and costs are going up while occupancies will be held at 25 – 50% of capacity indoors and the Fall and Winter are coming, so outdoor dining won’t last forever.
