Georgia restaurants struggle, businesses and workers on edge
Source: Atlanta Journal Constitution
Rob Atherholt is struggling to keep Taqueria el Vecino alive and its staff intact while business evaporates and public officials encourage citizens to avoid crowds.
By Sunday, business was off 60% and takeout orders – typically just a fraction of sales – were simply not enough to give him confidence that he can stay open, he said. “It’s day to day.”
So he is letting student part-timers go at the Decatur eatery while holding on to workers who depend on their jobs for a living, he said. “They’ve worked for me for seven or eight years. I am going to pay them, but their hours won’t be what they were.”
Atherholt’s emergency is industry-wide. For workers and owners alike, the health crisis triggered by the coronavirus pandemic has also quickly become a large and lethal economic threat.
Roughly 500,000 people work in the restaurant industry in Georgia, and roughly two-thirds of the state’s restaurants are in metro Atlanta, according to the Georgia Restaurant Association, which says that the lion’s share of the restaurants are individually owned. Many of the workers have no paid sick leave. Many of those in the industry take a large share of their pay in tips.
Some cities – including Brookhaven — have banned in-restaurant dining. Atlanta Mayor Keisha Lance Bottoms on Monday limited public gatherings to 50 people. In a press conference Monday, President Donald Trump advised Americans to stay away from bars and restaurants and to avoid crowds of more than 10 people.
A number of major chains — including McDonald’s, Starbucks, Pizza Hut, Papa John’s and Atlanta-based Chick-fil-A — have temporarily ended sit-in dining, while continuing to let customers take out food and drink. Atlanta icon The Varsity also closed its dining room seating, offering only takeout.
Even those who still have open dining rooms are looking at mostly empty chairs, so many are beefing up takeout services, said Karen Bremer, chief executive of the Georgia Restaurant Association. “But most restaurants cannot make a living doing delivery and carry-out.”
Until a few days ago, restaurants were operating in a tight labor market where the most recent, pre-virus unemployment rate for Georgia was 3.1%. Employers struggled to find and keep good workers. Now, as sales disappear, they are not anxious to let employees go because when the crisis ends, staffing up and retraining would be costly and time consuming.
But in a low-margin industry, many won’t have a choice, Bremer said. “Because you can’t exist with a business that is 50 to 70% off. No one can.”
Workers who are laid off can apply for unemployment insurance.
Inspire Brands said Monday it was moving thousands of its restaurants to a “to-go only” model. The Atlanta-based company said the shift applied to its Jimmy Johns, Sonic, Arby’s and Buffalo Wild Wings chains.
Among the restaurants that have decided to simply shut down and hope to wait out the crisis is the Rise-n-Dine in Emory Village.
“It is just a public health thing,” said George Bacso, the restaurant’s manager.
Owners considered and rejected the idea of takeout as flawed from a health perspective, he said. “Somebody has to touch that food. We have to package that food. And we may have a customer say, ‘Hey, I need ketchup,’ and touch one of our workers on the shoulder.”
Rise-n-Dine intends to pay its 21 employees while the restaurant is closed, he said. “We have a rainy day fund.”
Not everyone can do that.
Billy Brown, owner of There “gastropub” in Brookhaven normally employs nine full-timers and 14 part-time. With dining service shut down by city order, he plans to keep two people in the kitchen, one waitress to handle the takeout orders and one bartender.
“It’s going to be a very difficult couple of weeks until this passes,” he said. “I’m a small place. I don’t have the resources to pay them any kind of furlough pay.”
Take-out accounts for just 10% of his business, so the loss of in-dining is a financial disaster, Brown said.
On Monday afternoon, the chairs were already up on tables; the stools on the bar. And even with the cuts in his staff, he thinks his business can only last six weeks, he said. If it goes on any longer, “I’d have to fold.”
A series of restaurants has closed — at least for the duration of the crisis. Among those closing announcements were two well-known names in downtown Atlanta: Nikolai’s Roof and Trader Vic’s.
Yet some restaurants are looking for some middle ground.
Bottles & Bones in Suwanee opened about a month ago, serving diners seven days a week. But business took a dive over the past weekend. Monday, owner Rob Taranto said he’s decided to close Sunday through Wednesday, staying open Thursday through Saturday when the restaurant will offer either takeout or in-dining.
“We’re taking a limited number of reservations so as to control the number of people in the restaurant,” he said.
Bottles & Bones employs 45, but he plans to hold on to all staffers, despite the limited hours, Taranto said.
With testing still minimal and the number of confirmed cases still rising, even experts are not sure how long the crisis will continue.
Meanwhile, pain in the restaurant sector will not stay in the restaurant sector. The state’s restaurants were on track this year to account for $25 billion in sales, according to the Georgia Restaurant Association. And those 19,700 restaurants buy supplies from myriad other companies that sell everything from food to paper goods.
“I don’t need food prepped that we are not going to sell,” said Atherholt of Taqueria el Vecino. “If we are not selling steaks, then the meat supplier’s butcher has no work.”