As coronavirus anxiety grips Atlanta restaurants, owners may have to alter business models
Source: Atlanta Business Chronicle
The novel coronavirus outbreak is heaping great anxiety on the shoulders of Atlanta's restaurant workers. Soon, eateries may have to change the way they do business to stay afloat as fears over COVID-19 drive down dining room traffic.
Industry professionals in Atlanta and beyond have the outbreak, officially classified by the World Health Organization as a global pandemic, at the front of their minds. At the Charleston Wine + Food Festival in South Carolina last weekend, the subject dominated conversations among chefs, Meherwan Irani, co-owner of Chai Pani and Botiwalla told Atlanta Business Chronicle. The general consensus: A significant drop in sales over the next few weeks is inevitable.
"There is definite concern because of the cancelation of events and business dinners," Karen Bremer, chief executive officer of the Georgia Restaurant Association, told the Chronicle. "Just general going out to eat is being affected by businesses not allowing travel, businesses working remotely."
Atlanta has seen a flood of cancelations in the past 48 hours as coronavirus anxiety has boiled over. Atlanta Tech Village, the fourth-largest incubator in the country, canceled all public events and tours Thursday. The Atlanta Regional Housing Forum canceled its March 19 event. SHRM Atlanta's annual meeting was postponed to August. The Atlanta Convention and Visitors Bureau indefinitely postponed its March 19 Connect event at Ponce City Market.
It is not only the convention market drying up. Local sports have evaporated too. The NCAA men's basketball Final Four that was scheduled for Mercedes-Benz Stadium in early April is off. The suspension of the National Basketball Association, Major League Soccer and Major League Baseball seasons mean the Atlanta Hawks, Atlanta United and Atlanta Braves are out of action for the foreseeable future.
"It affects the industry significantly because leisure activities are usually paired with dining experiences," Bremer said.
The GRA originally forecasted $25 billion in sales for the industry statewide in 2020. Bremer did not have an updated estimate, but she did note some restaurants in Seattle, where the outbreak has hit hardest in the United States, have seen decreases approaching 90%. In Georgia, restaurants across the board are beginning to slow down, according to Bremer, but Asian concepts have felt the biggest impact because of COVID-19's origins in China.
Richard Tang, owner of Inman Park's Char Korean Bar & Grill, said traffic at his establishment has not yet dropped, but he noted Char is not a "traditional Asian restaurant." Tang does expect some diners to stay home as fears over the outbreak grow.
"Our biggest concern is not coronavirus but the way people are reacting," Tang said. "That’s a little concerning. Everybody’s fear mongering."
To ease fears in a sudden time of social distancing, the GRA says restaurants could rearrange dining rooms to make them less crowded and more routinely sanitize communal items such as salt and pepper shakers. Owners and operators can cut back hours and reduce staff to lower operational costs in a lean time. Melissa Davis, general manager and beverage director at Hazel Jane's in Old Fourth Ward, has already made this move.
"Weekdays have slowed down quite a bit, we’re still seeing coffee guests from neighboring businesses," Davis said. "But the virus, general fear and a slope in the stock market have definitely created a slow down in business. I think it’s an issue across the board."
There are some fixed expenses — such as rent — that cannot be avoided. The average restaurant has a profit margin of 3% to 5%, and there are some that will be forced to shutter if they face a steep sales decline that lasts for weeks.
"So it’s a mildly terrifying time for the industry," celebrity chef and local restaurateur Hugh Acheson said.
Acheson said traffic began to slow at his Atlanta restaurants, Empire State South and By George, on Wednesday. His Athens restaurant Five & Ten is currently closed while the University of Georgia is on Spring Break, but considering UGA's impending suspension of classes, Acheson is expecting a hit there as well.
Canlis, a fine-dining restaurant in Seattle, announced on Thursday its plans to temporarily revamp as a pick-up and delivery operation to keep patrons engaged. Acheson sees this as a possible way forward.
"My team and I are going to be meeting in the next little while to look into situations like that," the "Top Chef" judge said. "We’ve already posited an idea in the building where Empire is that we can go and do a lot of very organized, low-assembly, hot meals to go."
As more primary school systems close due to COVID-19, some students who rely on school breakfasts will face hardship. Here, restaurants may have an opportunity to serve the public.
"I have suggested that restaurants have the potential to be a site for the schools to be able to use us as a point to get the school lunches to the children if they're out of school," Bremer said. "It is a particular concern in the United States. Twenty-two million children get free or reduced-price meals, and if the school systems shut down, how are those kids going to get their meals? I've suggested that the restaurant industry, since we have FDA-approved kitchens, could be a site where people could pick up their food."
What restaurants have going for them is that their health practices are already formally scrutinized. Vigilant hand-washing seems to be a new concept for the general public, but it is meant to be part of normal operating procedure for restaurant workers. The GRA is recommending chefs and owners clearly communicate this to patrons.
"Restaurants will stay open," Bremer said. "They'll modify how they're running their business, whether it's going to counter service or delivery service. They will make modifications, but restaurants will stay open."