Earlier this month, Massachusetts Gov. Charlie Baker announced that the state would prohibit restaurants from offering dine-in service through April 6. The order was aimed at slowing the spread of COVID-19 and allowed restaurants to remain open for takeout and delivery service.
Operators who decided to remain open hoped that whatever revenue they scraped together could function as a stopgap between a hopeless situation — a pandemic that’s made it impossible to safely serve diners in their restaurants — and the eventual light at the end of the tunnel, when the COVID-19 curve is flattened to a point that allows people to safely patronize restaurants again.
After just two weeks, the financial realities of downsizing full-scale restaurants into delivery operations are coming into focus. Restaurants operate on razor-thin margins when business is booming, and those tiny margins have disappeared in the face of a pandemic. Takeout and delivery are temporary solutions to a problem that currently has no end; they’re not replacing the revenue that comes from being a full-service restaurant.
Restaurants that remain open for takeout and delivery have been able to retain some staff, but large-scale layoffs have become the norm. Karen Akunowicz, who owns and operates Italian restaurant Fox & the Knife in South Boston, told Eater she had to cut 90 percent of her hourly staff, even though the restaurant remains open for takeout and delivery.
“We are doing two times the amount of work for half the revenue,” she told Eater via email. “We don’t know yet how sustainable that will be — or how long we can continue. It’s ‘enough,’ but certainly not a sustainable model.”
Deirdre Auld, who is the director of operations at Coda Group — which includes Coda Kitchen and Bar, Canary Square, SRV, and the Salty Pig — told Eater that the Salty Pig is in a similarly difficult position.
“We are clearly down significantly in revenue,” Auld said via email. “Offering to-go food for four days a week does not make up for more than one day of regular revenue at the Salty Pig. But we’re trying to do whatever we can to keep some folks in jobs, and give them a space to look forward to coming to work in.”
Remaining open to earn a fraction of normal revenue — and giving some portion of that to one delivery app or another — isn’t worth it for some operators. Daniel Myers, who owns Loyal Nine in Cambridge, previously told Eater that he thinks allowing restaurants to remain open for takeout and delivery is an actively bad idea.
“It provides legal reasoning for your landlord and insurance company to say that you were allowed to operate,” he said via email. “We literally do less than one percent of sales in takeout, and the profit margin is comparable — three percent. We pay rent for seating space, not kitchen space for takeout only.”
Michael Scelfo, who owns a trio of restaurants in Cambridge — Alden & Harlow, the Longfellow Bar, and Waypoint — decided against opening for takeout and delivery for a suite of reasons. The Cambridge chef and restaurateur said that his rent and expenses are so high that revenues from takeout and delivery wouldn’t make much of a difference, but his main reason for not offering it is rooted in public health.
“First and foremost, it was for health reasons,” he told Eater. “Everyone needs to do what feels right for them at this moment. I’m not here to judge anyone, but my position was wondering how we would contribute, or not, to this public health crisis.”
“There’s no upside to being open given those health concerns,” he said. “I didn’t want to put my employees or my customers — or anyone close to me — at risk.”
There are currently several legislative measures that have been proposed or enacted at the state level — allowing restaurants to sell alcohol with takeout and delivery orders, requiring insurance companies to cover business losses to to viruses and pandemics (which they currently do not), and allowing some restaurants to defer the payment of meals taxes without penalty until June 21 — that can help restaurants weather the financial storm and stay afloat while they wait to see how the pandemic will play out.
Some restaurants will continue to offer takeout and delivery, but legislative action on a large scale — the CARES Act was a start, but it hardly goes far enough — is the restaurant industry’s biggest hope for survival.
“People will want to get out and get back to a normal life when this is all over,” said Scelfo. “And we have a right to survive. We’ve taken the steps you’ve asked us to take, and we shouldn’t be punished on the back end for doing our part to help flatten the curve.”
• All Massachusetts Restaurants and Bars Will Shut Down for Three Weeks, Except for Takeout and Delivery [EBOS]
• Massachusetts Bars and Restaurants May Soon Be Able to Sell Beer and Wine With Takeout and Delivery Orders [EBOS]
• Some Massachusetts Restaurants Can Defer Meals Taxes Until June [EBOS]