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December 21, 2020by David Klemt David Klemt No Comments

75% of American Restaurant Operators Expect Decreased Sales Through Start of 2021

75% of American Restaurant Operators Expect Decreased Sales Through January

by David Klemt

The fifth National Restaurant Association COVID-19 Restaurant Impact Survey results have been released.

Unsurprisingly and unfortunately, the news is not good.

For their fifth installment, the NRA surveyed 6,000 restaurant operators and 250 supply chain businesses between November 17 and 30. Full-service and limited-service restaurant operators, independent and chain, reported their sales had slipped in October.

Only 12 percent of restaurant operators reported seeing sales growth. In comparison, 79 percent said sales were down.

Per the NRA survey, one reason for the decline in sales is outdoor dining season coming to a close. In New York City, per Governor Andrew Cuomo’s order banning indoor dining, outdoor dining is the only option beyond delivery and takeout. However, the weather is less than attractive for outdoor diners.

Costs are disproportionate to sales for most operators. Nearly 60 percent of survey participants reported increased labor costs when compared to the start of the Covid-19 pandemic in the United States.

Profit margins, historically thin even at the best of times, were reported by 86 percent of operators who partook in the survey to also be lower than the they were prior to the pandemic.

The NRA’s predicted outcome for the industry is that without targeted and significant federal relief specifically for restaurants and bars, more temporary and permanent closures are coming, as are further losses of jobs.

According to an estimate from the NRA, more than 110,000 restaurants and bars had closed by December 1. On average, these establishments employed 32 people, and 17 percent of the closed businesses employed a minimum of 50 people.

Close to 40 percent of survey participants indicated they were considering closing their restaurants or bars temporarily and waiting out the pandemic. That means layoffs that could affect dozens of employees per establishment. Almost 60 percent of survey participants expect a reduction in their workforces over the coming three months.

Sales are expected to lag through the start of next year. The majority of operators surveyed, 75 percent, expect sales to fall even further from their already lower levels through the start of next year.

If that logical assumption becomes reality, slowed sales may trigger a domino effect: reduced traffic, plummeting sales, and increased operational costs leading to layoffs, temporary closures, and ultimately permanent closures.

Restaurants and bars require targeted relief for the industry to survive. If that help doesn’t come soon, if the RESTAURANTS Act or similar legislation isn’t signed into law, the country will lose millions of jobs permanently. The economy will be dealt a lethal blow, losing out on tens of billions of dollars.

Now is not the time to back off the pressure being put on Congress and Senate to pass the RESTAURANTS Act. Click here to tell them time is up—they must return to Washington in January to save our restaurants and bars.

Image: Enrico Hänel from Pexels

December 20, 2020by David Klemt David Klemt No Comments

“More help is on the way.” But not for restaurants and bars.

“More help is on the way.” But not for restaurants and bars.

by David Klemt

Speaking about the economic relief package, Senate Majority Leader Mitch McConnell (R-KY) struck what can be generously described as tainted altruism.

“More help is on the way,” said McConnell on the Senate floor on Sunday. He also took the time to attempt to absolve Republican leadership of any blame for the glacier-paced movement forward on relief, laying the fault at Democrats’ feet.

To be blunt, both parties have failed the American people and small businesses in terms of providing federal assistance during the pandemic.

After months of inaction on relief—with the exception of a Congressional vote in September that failed to pass in the Senate—and weeks of discussions and partisan sniping, negotiators finally managed to zero in on a bill with a strong likelihood of becoming law.

Yet sifting through remarks made by some politicians regarding pandemic relief over the course of the past several months, variants of the word “prompt” were bandied about.

If the package passes—which is expected to happen later today—members of Congress and Senate will no doubt perform self-congratulatory victory laps for finally doing their jobs after months of failing to do much of anything in the way of relief. Meanwhile, millions of Americans will continue to face life-altering challenges, reaching out for lifelines that are simply not there.

Included in the package are a number of details identified as “key” to both political parties:

The ability for businesses that had received Paycheck Protection Program loans which had been forgiven to deduct the costs said loans covered on their federal tax returns.
Speaking of the PPP, it will be reopened with over $284 billion intended for small businesses.
$12 billion in available PPP funds for minority-owned and “very small” businesses.
$15 billion made available in PPP funds specifically for independent movie theaters, live music venues, and cultural institutions like museums.
$600 stimulus checks for qualifying adults (and each child in a household) who earned $75,000 or less in 2019. The amount would be reduced for people who earned more. Those who made $99,000 or more last year are not expected to receive a stimulus check.
A $300 boost to unemployment benefits for 11 months, with a possible implementation date of December 27.
Gig and contract workers enrolled in the PUA or PEUC programs can expect the same $300 boost to their benefits for 11 to 13 weeks.
The deadline to spend billions of dollars made available to cities and states via the CARES Act is expected to be extended from the end of this year to be an entire year.
$25 billion in emergency assistance for renters.
A moratorium on evictions expected to be extended through the end of January.

What’s not in the package expected to be rushed through Congress? Hundreds of billions of dollars in state and local aid Democrats wanted, liability shields for corporations Republicans wanted, the $120 billion RESTAURANTS Act, or the $240 billion Restaurant and Foodservice Industry Recovery Fund.

Despite McConnell’s declaration that federal assistance is on the way, the economic relief plan leaves an industry that employs millions of American workers and contributes hundreds of billions of dollars to the nation’s GDP (four percent before the pandemic) to fend for itself.

Guy Fieri, in all seriousness, has done more for more unemployed restaurant workers than the government, raising more than $21 million in relief funds in under two months.

The hospitality jobs lost due to Covid-19 aren’t expected to return. With more than 110,000 restaurants closed—and counting—the economic impact will be felt nationwide and, in all probability, have global ramifications.

The PPP turned out to be an absolute farce: billions of dollars went to businesses that are anything but small by definition. There’s little reason to believe the process will improve much (if at all) this time around.

And while restaurants and bars have been crucial to nurturing community, connections and culture since inception, they’re clearly not considered culturally relevant institutions by politicians.

With Congress facing an uphill battle in terms of drafting the language for the relief bill and then voting on it, expecting our elected officials to propose, negotiate, draft and vote on a bill for the hospitality industry seems foolish. That means the earliest the industry can expect help—which seems exceedingly unlikely to ever materialize—is in late February of 2021.

Apparently restaurants, bars, and the foodservice professionals they employ aren’t key to politicians on any side of the aisle. Well, not until they need venues to host their campaign fundraisers, that is.

Image: Andrew Seaman on Unsplash

December 16, 2020by David Klemt David Klemt No Comments

Is Texas the Model for Restaurant Operation During the Pandemic?

Is Texas the Model for Restaurant Operation During the Pandemic?

by David Klemt

The mass exodus to Texas has been all over the news lately.

Many new Texas residents moved to the Lone Star State moved from California. Some moved to escape exorbitant rent, home prices, and taxes. But others have left California due to what some deem over-reaching Covid-19 restrictions.

On December 5, a regional stay-at-home order took effect in five California regions. Included in that order was a restriction on “nonessential trips” between the hours of 10:00 P.M. and 5:00 A.M. Some California lawmakers disagreed with labeling the restriction a “curfew” but it certainly seemed like one to Californians.

Also included in the order was a full shutdown of businesses categorized as bars, while restaurants were restricted to delivery and takeout only. In response, a group of operators in Orange County formed the #OPENSAFE movement and made it known they intended to defy the order, which is expected to remain in place through at least Christmas.

It’s likely that some former Californians flocked to Texas due to Governor Gavin Newsom’s restrictive stay-at-home order and “Covid fatigue.”

But is Texas less restrictive than California?

Some counties in Texas did implement curfews. For example, a 10:00 P.M. to 5:00 A.M. curfew took effect in Bexar, El Paso and San Antonio Counties over the Thanksgiving holiday. However, they were short-lived and ended November 30.

According to reports, El Paso County Judge Ricardo Samaniego is mulling the idea of a “partial curfew” for the period between the Christmas holiday and New Year’s Eve.

One major difference between the orders implemented in California and those that were issued in Texas is that the latter weren’t blanket, statewide restrictions.

Another difference regards bars. Drinking establishments are closed throughout California. In Texas, according to this document located on the Texas Alcoholic Beverage Commission website, “[b]ars or similar establishments located in counties that have opted in may operate for in-person service up to 50% of the total listed occupancy inside the bar or similar establishment,” and guests must remained seated if they’re drinking or eating.

Interestingly, no occupancy limit exists for a bar’s (or “similar establishment’s”) outdoor area. Another interesting detail: “the County Judge of each county may choose to opt in with the Texas Alcoholic Beverage Commission (TABC) to allow bars or similar establishments to operate with in-person service.”

That statement relates to Texas’ GA-32 executive order. In counties where Covid-19-related hospitalization rates and case counts meet state requirements, county judges can opt-in to reopen bars. In fact, the TABC features a map—updated daily at 3:00 P.M. CST—that displays the counties in which bars are permitted to open their doors.

Bars are required to stop serving alcohol at 11:00 P.M. but don’t have to close for business or send guests away at that time.

Restrictions are different for Texas restaurants. According to the TABC’s website, “Restaurants may operate for dine-in service up to 75% of the total listed occupancy inside the restaurant; outdoor dining is not subject to an occupancy limit; and restaurant employees and contractors are not counted towards the occupancy limitation. This applies only to restaurants that have less than 51% of their gross sales from alcoholic beverages.”

Per news coverage, the cutoff rule Texas bars operate under doesn’t apply to restaurants, motivating the decision of thousands of bar owners to reopen their businesses as restaurants.

One of the highest-profile ex-Californians who made the move to Texas recently is Joe Rogan. Rogan speaks with Texas native and entrepreneur Richard Rawlings on the most recent episode of The Joe Rogan Experience podcast on Spotify. The subject of California comes up roughly 23 minutes into the discussion, with Rogan calling out California and saying that Californians “are recognizing” that “California itself doesn’t exist as everybody thought of it.”

Rogan goes on to say that California’s government is to blame for the exodus to Texas, saying, “Literally, it’s a case of now we know that if you have poor government, the government can ruin a state.”

He praises Texas Governor Greg Abbott and his approach to Covid-19. In particular, Rogan lauds Gov. Abbott for shutting down the state for a short period of time but allowing businesses to remain open. He mentions that while businesses are still struggling—capacity restrictions, social distancing protocols, mask requirements—at least they’re able to operate.

At around the 24-minute mark, the conversation shifts to restaurants in particular.

“You can’t even go eat outside. There’s a 10:00 P.M. curfew in Los Angeles. It’s insane. There’s no science behind it, either. There’s no science that shows that if you get people to stay home after 10:00 P.M. that there’s less transmission,” says Rogan.” There’s no science, nothing. It’s arbitrary decisions that are made by politicians. And that’s the minimum: The outdoor dining thing is the most egregious because you have all these people that spent so much money to try to convert their restaurants and make these outdoor dining [spaces]—spent thousands of dollars that they didn’t even fucking have. They just wanted to stay open, and then they just get shut down.”

Rawlings then references the owner of Pineapple Hill Saloon & Grill, Angela Marsden, and the emotional, viral video she posted in response to Los Angeles restaurants being prohibited from offering outdoor dining.

Marsden claimed to have spent $80,000 to comply with L.A. County health requirements and create an outdoor dining area before the restriction was put in place. In the video, she shows a television production crew dining under tents set up next to her outdoor dining area. Ultimately, Marsden had to shut down after running out of funds.

“I was pretty pissed off at that one because, you know, we shut down Gas Monkey Bar & Grill for the winter,” says Rawlings. “We’re just hanging out, see what happens.”

Texas hasn’t fully reopened and some may still view some of the state’s Covid-19 rules as arbitrary. However, capacity limitations for bars (up to 50 percent) and restaurants (up to 75 percent) are much more viable for operators.

There are other questions to consider regarding Covid-19 protocols and restrictions. If state lawmakers implement rules that ultimately encourage their residents to flee to other states, does that increase the risk of infection rates, hospitalizations and deaths rising in those states? Is America capable of setting aside our divisions and pulling in the same direction to flatten curves nationwide? Are our lawmakers capable of abandoning the arbitrary for the targeted and logical to provide relief and increase the survivability rates of restaurants, bars and other small businesses?

Covid-19 protocols can change in any state at any time, but for now, Texas may serve as the best model for restricted restaurant and bar operations in the United States.

Image: Thomas Park on Unsplash

December 15, 2020by David Klemt David Klemt No Comments

Can Vending Machines Help Restaurants and Farmers Fight Food Waste and Generate Revenue?

Can Vending Machines Help Restaurants and Farmers Fight Food Waste and Generate Revenue?

by David Klemt

French farmers have found an innovative way to fight food waste, generate much-needed revenue, and provide fresh produce to the public: vending machines.

Last week, Barron’s, a publication dedicated to financial and investment news coverage, published an article about farmers in France finding more success selling produce via vending machines than their own farm stores.

All manner of items can be loaded into vending machines—fruits, vegetables, eggs and dairy products, for example—and famers are able to choose how many lockers their setups will include. For instance, one farmer invested in a 60-locker vending machine for €30,000, while another placed a machine with 88 lockers close to her farm.

Selling via vending machine was lauded by Barron’s as respectful of health and safety regulations since farmers and consumers aren’t interacting with one another directly.

This development begs the question: Would selling produce directly to consumers through vending machines prove viable in the United States and Canada?

The havoc afflicting the restaurant business doesn’t affect only the owners, operators and employees—it’s a shockwave ripping through other industries, such as farming and agriculture. For months, news coverage has included reports of farmers sharing stories of showing up to restaurants to deliver food only to find them closed, leaving farmers with surpluses of food destined to go to waste.

One option to make this work could include restaurant operators and local farmers partnering to set up vending machines (locker type, not the standard snack versions). This would help reduce the initial buy-in and both operators and farmers would have access: restaurants would use them for contactless meal and meal kit pickup, and farmers could accept direct-to-consumer orders of fresh produce fulfilled through the lockers.

In fact, creative operators may be able to build meal kits that combine their menu items with ingredients sourced from local farmers.

The partnership concept may prove more viable for connectivity reasons as well. In France, one major supplier of vending machines, according to Barron’s, indicated the machines required a reliable 4G connection, in part because they recommend only accepting credit card and online payments to reduce vandalism. Placing vending machines on-site should provide more stable connections and steadier consumer traffic.

Politicians continue to drag their feet and posture in regards to Covid-19 relief. It has been clear for months that the public and businesses without lobbying power are being left to fend for themselves. A partnership between restaurants and farmers could prove mutually beneficial for the survival of the restaurant, farming and agriculture industries.

When contacting their representatives to demand they help we the people and the restaurant industry, it could be wise to remind them that relief for restaurants is also relief for farmers, saving millions of jobs and thousands of farms at risk of permanent loss, along with avoiding literal tons of needless food waste.

Image: Alex Motoc on Unsplash

December 11, 2020by David Klemt David Klemt No Comments

Orange County’s #OPENSAFE Restaurant Collective Defies Governor Newsom

Orange County’s #OPENSAFE Restaurant Collective Defies Governor Newsom

by David Klemt

A group of California restaurant operators is pushing back against current restrictions in defiance of orders they feel go too far.

Gov. Gavin Newsom’s stay-at-home order mandates that restaurants remain open only for delivery and takeout. The order affects five California regions: Northern California, the Bay Area, Greater Sacramento, the San Joaquin Valley, and Southern California.

Throughout 2020, similar orders have been issued throughout the United States. They’ve included an array of restrictions, from banning indoor and outdoor dining to choking traffic by imposing significant capacity restrictions.

Allowing only delivery and takeout is not the health and safety solution lawmakers believe it to be. Third-party delivery platforms and their policies can be detrimental to operators, worsening an already bad situation.

Several operators in Orange County, located in the Southern California region, are, per an Instagram post, refusing to comply with Gov. Newsom’s order.

The statement on publicist Alexandra Taylor’s Instagram account is posted in its entirety below:

“We, as responsible small business owners and operators, do hereby declare our intention to protest the current state stay home order and to maintain our safety standards of service as set forth by country and state health guidelines.

“We cannot, in good conscience, allow our employees and their families to have their health and safety jeopardized as resources to them have been exhausted.

“We will continue and strengthen our mitigation of the potential spread of SARS-Covid19 with the highest standards of safety protocol including, but not limited to: Outdoor Dining, Socially Distanced Seating, Mask Requirements when not seated, PPE, Readily Available Sanitizer to back of house/front of house staff, immediate quarantine and isolation of potentially infected employees, Barriers to prevent close quarters transmission between guests, limited capacity, etc.

“Although eating and drinking establishments (both indoor and outdoor) have shown to increase the potential for viral transmission, current data also indicates that travel and essential shopping have as much as a 10x more likely chance of transmission than these establishments based on CDC risk assessments.

“We agree, as responsible business owners, to commit to staying open with a dedication to public health.”

The image of the statement is accompanied by the hashtag #OPENSAFE and American flag emoji. More than 80 Orange County establishments that support the #OPENSAFE movement were listed in the caption of the post at the time of publication. The original post states that the list of venues is growing daily.

Taylor, the founder and president of The ATEAM, included a caption that read, in part:

“RESTAURANTS. I represent them, I invest in them, I celebrate them, I support them, I am passionate beyond words for them, for the PEOPLE behind them— and I will fight for them.

“This is a declaration for not only restaurants but all SMALL BUSINESS OWNERS to commit to STAY OPEN SAFELY and RESPONSIBLY, while giving their establishments, their employees, and their families a fighting chance to survive this BS.”

State and county officials across the nation can impose a number of penalties on businesses that defy orders. Fines and temporary suspensions of business licenses appear to be the most common. In Chicago, for example, operators can face fines in excess of $10,000. One restaurant, Ann Sather, owned by Chicago Alderman Tom Tunney, violated a ban on indoor dining and ignoring Covid-19 safety rules and faces a maximum fine of $10,500.

Earlier this year, a restaurant in Monterey County, located in California’s Bar Area region, faced fines of up to $35,000 violating shelter-in-place orders.

It’s unclear at the moment if the collective of defiant Orange County operators will face consequences for their civil disobedience. Orange County Sheriff Don Barnes has stated that the department has no intention of enforcing Gov. Newsom’s order closing restaurants.

“Orange County Sheriff’s deputies will not be dispatched to, or respond to, calls for service to enforce compliance with face coverings, social gatherings, or stay-at-home orders only,” said Sheriff Barnes. “Deputies will respond to calls for potential criminal behavior and for the protection of life and property. Our actions remain consistent with the protections of constitutional rights.”

Whether operators in other counties across America coalesce around their own #OPENSAFE movements remains to be seen. The consequences must be fully understood and weighed, and law enforcement’s stance on enforcing stay-at-home and shelter-in-place orders regarding bars and restaurants must also be considered.

Two things are, however, clear. One, operators have had enough. Two, government officials need to listen to restaurant and bar operators and workers about the impact of restrictions before issuing orders.

December 9, 2020by David Klemt David Klemt No Comments

One Fair Wage Survey Results: Foodservice Professionals on Front Lines of Infection Risk and Hostility

One Fair Wage Survey Results: Foodservice Professionals on Front Lines of Infection Risk and Hostility

by David Klemt

Over a three-week period, One Fair Wage (OFW) surveyed 1,675 foodservice workers in five states and Washington, D.C.

The survey was initially sent to more than 61,000 applicants to the One Fair Wage Emergency Fund in Illinois, Massachusetts, New Jersey, New York, Pennsylvania and D.C. By November 9, 2,621 respondents had completed the OFW survey online. A total of 1,575 indicated they were currently employed and an additional 100 surveys were completed by phone.

One of the key takeaways of the survey is at once disturbing and unacceptable but not, infuriatingly, shocking. Not only did significant percentages of respondents report lax Covid-19 protocol training and enforcement along with increasingly hostile guests, close to half revealed “a dramatic increase in sexual harassment” since the pandemic struck.

Increased Sexual Harassment

Forty-one percent of survey respondents noted a marked shift in the frequency that guests are subjecting foodservice workers to unwanted sexualized comments. A quarter said they had personally experienced or witnessed “a significant” change in this manifestation of sexual harassment.

An analysis by OFW of the comments shared by respondents reveals the impact that this increase in sexual harassment has on the recipients. The comments have a negative effect on workers’ sense of safety in the workplace, financial security, physical health, and emotional and psychological health.

Of the 25 percent of the female respondents who had personally experienced or witnessed sexual harassment, 43 percent reported that comments were directly tied to social distancing and wearing masks, two pillars of Covid-19 health and safety protocols.

Identified by OFW as a “mild example” of the unwanted comments being made, “Take your mask off I want to see what’s underneath,” provides insight into the overall “theme” of the harassment being made. Many guests engaging in harassment appear to be sexualizing covered noses and mouths. Indeed, other comments support this analysis:

“Come on, sweetie. Lemme see that pretty face under there. Take it off for me, will you? Just a quick flash.”
“Please take the mask off, I want to see your lips.”
“Take off your mask so I know how much to tip you.”

When foodservice pros rebuff these unwanted advances, the responses tend toward hostility and smaller—or no—tips. In short order, these types of aggressors have found a way to weaponize the guest-server power dynamic and seemingly fetishize required Covid-19 protocols.

Increased Hostility

Whereas close to half of OFW survey respondents reported increased sexual harassment, more than three-quarters reported increased hostility from guests.

A staggering 78 percent of respondents said they had experienced or witnessed increased hostility as a response to following and enforcing Covid-19 protocols. Almost 60 percent said these incidents were occurring on a weekly basis.

Again, the power dynamic comes into play. Nearly 60 percent of respondents reported hesitation in enforcing Covid-19 protocols for fear doing so would affect their tips negatively. That concern is rooted in reality: 65 percent of respondents said they were tipped less on a weekly basis after enforcing health and safety protocols.

More than 80 percent said tips have decreased since the pandemic took hold, with 65 percent reporting that decrease to be 50 percent or more.

Impact of Subminimum Wage

One Fair Wage, as their name suggests and their mission clearly states, advocates and campaigns for all employers in America to pay full minimum wage. The organization also calls for tipped workers to receive full minimum wage plus their tips.

Per OFW, service workers—including people who work in salons and airports—are twice as likely to require food stamps to get by when compared to the rest of the workforce in the United States. Foodservice workers, however, are subjected to more sexual harassment than those workers in any other industry. The U.S. Equal Employment Opportunity Commission (EEOC), a federal agency, has identified the restaurant industry as the sector with the most sexual harassment charges filed by women.

This isn’t a digression. The OFW’s mission for a full minimum plus tips for tipped workers would have a direct impact on community health and safety. Infectious disease experts have warned that Covid-19 will not be the last pandemic with which we’ll have to contend. According to a report released by the CDC in September, the risk of contracting Covid-19 doubles for adults after dining inside a restaurant.

Were all service workers working for a full, living minimum wage, they’d likely be less concerned with incurring a guest’s wrath in the form of a reduced tip or no tip at all. The OFW survey findings that foodservice pros are being harassed to remove their masks or not socially distance—risking the health and safety of themselves and guests, then of family and friends, and therefore the community—and that 58 percent are reluctant to enforce Covid-19 protocols out of concern for their tips illustrates, in part, how subminimum wage for tipped workers can impact the health and safety of communities overall.

The pandemic has made foodservice workers and others who work with the public, by default, Covid-19 protocol enforcers. Clearly, significant swaths of the public feel zero compunction when it comes to responding with hostility, threats, harassment, and refusal to comply.

It’s also clear that guests who react with hostility and intimidation when employees are enforcing officially mandated health and safety requirements lest their employer face fines, the suspension of their business and/or liquor license, or any other form of punishment that puts their employment at risk won’t hesitate to wield the guest-server power dynamic as a weapon. That weapon can ultimately endanger an entire community.

The Good News

A mere ten percent of survey respondents reported their employers instruct employees to follow all Covid-19 health and safety protocols on a consistent basis, and just 31 percent of respondents said their employer follows all such protocols.

Those are startling numbers since ten percent of respondents said they had contracted Covid-19, 88 percent said they knew someone had contracted the infection, 44 percent reported that at least one coworker had contracted Covid-19, and a depressing 42 percent of those who reported knowing someone who had contracted the illness had died from it.

However, there were some positive pieces of data shared by survey respondents:

92 percent reported their employers require all workers to wear masks.
86 percent reported their employers require all workers to wash hands frequently.
86 percent reported their employers require tables and chairs be wiped down and sanitized between uses.
78 percent reported their employers provide employees with personal protective equipment (PPE).
75 percent reported that a supervisor has told them they will have their back if they tell a guest or coworker to put on their mask whenever they’re within six feet of them.

In a perfect world, those percentages would all be one hundred. This isn’t a perfect world and there’s obviously major room for improvement. Management must step up in this time of crisis and uncertainty and embrace true leadership:

Respect the fact that employees are putting themselves at risk every shift. Put people first.
Avoid putting the bottom line ahead of health and safety.
Create and enforce a zero-tolerance sexual harassment policy—for employees and guests. Support employees when they report sexual harassment.
Communicate clearly and consistently. Transparency and targeted training must be priorities.
Display integrity when making decisions and enforcing rules.

Foodservice and hospitality industry professionals are on the front lines, sacrificing their own health and safety—and that of the people inside their bubble—to keep the industry afloat. Ownership and management need to protect them.

Read the entire OFW report here.

Image: engin akyurt on Unsplash

December 9, 2020by David Klemt David Klemt No Comments

Significant, Permanent Restaurant Closures Expected to Rock Canada Unless Situation Improves

Significant, Permanent Restaurant Closures Expected to Rock Canada Unless Situation Improves

by David Klemt

Industry surveys continue to reveal how dire the situation is for operators.

On December 8, Restaurants Canada, a non-profit that represents and advocates for the Great White North’s restaurant industry, shared the results of a survey they had conducted between November 26 and December 4. A total of 511 surveys representing 3,000 restaurants were completed.

According to Restaurants Canada, the nation’s foodservice industry consists of 97,500 establishments ranging from QSRs to bars and full-service venues.

More than eight out of ten survey respondents answered that they are either barely staying afloat or are operating at a loss. Drilling deeper, significantly more restaurants are operating at a loss—65 percent of survey respondents fall into this category. Just 19 percent of restaurants represented by survey respondents are able to break even.

That’s 2,400 restaurants of 3,000 struggling to survive, and 78,000 restaurants out of 97,500, assuming the survey sample size accurately represents the overall industry in Canada.

To understand the long-term effects of government-mandated restrictions and shutdowns, one has only to digest another startling statistic: Restaurants operating in the red aren’t expecting to return to profitability for a minimum of 12 months.

Under optimal conditions, the average Canadian restaurant operates on razor-thin margins. Per Restaurants Canada, restaurants keep just five percent of every $10 in sales on average, or 50 cents. The industry is Canada’s fourth-largest employer (it’s number five in the United States, for comparison), accounting for 1.2 million jobs, 58 percent of which are held by women. Over thirty percent of owners, operators and staff belong to a visible minority, further illustrating how important restaurants are to diversity and the economy; half of all restaurants in Canada are operated by immigrants. Just like in the America, restaurants are the first employer for most Canadians.

The industry is crucial to Canada, but this vital resource is under serious threat. One of those threats comes from lawmakers whose restrictions are making it much more difficult for operators to wring any profits out already miniscule margins. Much like the situation afflicting the industry in the United States, the situation is going to get worse in short order without government relief.

Restrictions are simply nails in coffins unless they’re accompanied by relief.

“Our members are seeking a new year’s resolution from government, not only to support their survival but our industry’s vital role building back a stronger, more resilient Canada,” said Todd Barclay, president and CEO of Restaurants Canada. “Restaurants Canada is calling for a national working group to pave the way for the foodservice sector’s revival, building on the commitment in the federal government’s 2020 Fall Economic Statement to provide targeted, sector-specific support to restaurants and other hardest hit businesses.”

That national working group, according to Restaurants Canada, should focus on providing businesses being affected by government-mandated restrictions with “sufficient, efficient and effective aid”; developing campaigns that make it clear to Canadians that restaurants are capable of safely and reliably providing safe meals; promoting delivery and takeout as a viable way for the public to support restaurants; connecting with operators to understand the industry’s needs and pain points to ensure they’re in as strong a position as possible when entering the post-pandemic economy.

The next six months are crucial to the survival of Canadian restaurants. If things don’t improve, should the government not address the industry’s situation and provide relief, 48 percent of single-unit operators surveyed by Restaurants Canada indicated they expect to close within six months. That number jumps to 56 percent for multi-unit operators, who expect to close at least one of their locations (also within six months).

Restaurants Canada is asking for anyone who supports the formation of a dedicated national working group to contact their Member of Parliament via this link.

Photo by Marcus Urbenz on Unsplash

December 7, 2020by David Klemt David Klemt No Comments

National Restaurant Association Shares Startling Statistics

National Restaurant Association Shares Startling Statistics
by David Klemt

An email sent out by the National Restaurant Association yesterday included statistics about the state of restaurants in the United States.

The revelations are breathtakingly disturbing.

While Congress “has been trapped in a political tug-of-war,” the reality for restaurants has only gotten bleaker.

According to the NRA, their most recent survey found that 110,000 restaurants have closed since Covid-19 first dug its infected claws into the United States. That’s an increase of 10,000 closures since the NRA’s last survey, the results of which were released back in September.

Many people outside of the industry are likely under the impression these closures are the result of inexperienced owners failing to adapt. A second NRA statistic dispels that misconception.

Sadly, the average age of the restaurants that have been closing is 16 years old. Sixteen percent had been open for more than three decades.

These closures aren’t the result of inexperience, they’re largely the byproduct of mandated shutdowns—repeated, in some markets—and restrictions handed down by officials who don’t understand the business.

Unfortunately, there’s not much reason to be optimistic that these closures are temporary. The majority of survey respondents who have closed their restaurants, 52 percent, said they won’t return.

The NRA is strongly encouraging everyone to let Congress know that enough is enough—they must make real progress to help the industry.

Please visit RestaurantsAct.com, click the button to email your lawmakers, and share that link with family, friends and industry peers. Don’t let Congress leave for the year without making your voice heard and telling them to pass relief for restaurants and bars.

If our elected officials don’t act fast, things will only get worse.

Image by Wokandapix from Pixabay

December 7, 2020by David Klemt David Klemt No Comments

LCBO and SkipTheDishes Hit Pause on Partnership After Public Lashing

LCBO and SkipTheDishes Hit Pause on Partnership After Public Lashing

by David Klemt

The Liquor Control Board of Ontario (LCBO) faced outrage over the weekend, ultimately deciding to “pause” a controversial partnership after receiving a public lashing.

In case you missed it, the LCBO and SkipTheDishes announced on December 4 that they had partnered to offer home deliveries of beer, wine and spirits in Toronto. For those who are unfamiliar, SkipTheDishes is a food delivery service similiar to Grubhub that serves Canada. In fact, SkipTheDishes pulled out of the United States in 2020 and their services were handed over to Grubhub.

Just two days after the partnership was made public, it was announced by the LCBO that, due to “direction from the Ontario Government,” the deal had been suspended.

Restaurants and bars in Ontario have been allowed to offer alcohol for delivery and takeout since March via an emergency order due to the Covid-19 pandemic, shutdowns, and utter carnage that has befallen the industry. Many would like for the emergency order to be made permanent.

To understand the outrage, one must realize that restaurants and bars in Ontario have been operating under forced lockdowns. Premier Doug Ford announced the lockdown—which affected Toronto and Peel Region—on November 20. It went into effect a minute past midnight on November 23. No end date accompanied the mandate.

When the LCBO—which is able to make purchases and sales of beverage alcohol at lower wholesale prices than restaurant and bar owners and operators—arranged the deal with SkipTheDishes, those who operate in Toronto and Peel interpreted the move as undercutting their struggling businesses. Alcohol delivery and takeout is one of the only ways operators in those areas can generate any revenue and give themselves a fighting chance to keep from closing their doors permanently.

In terms of optics, the situation did anything but paint the LCBO and SkipTheDishes in a positive light. The LCBO, for those outside Canada, is what’s known as a Crown Corporation. That is, it’s entirely owned by the Sovereign of Canada—a state-owned enterprise. One could argue that it appeared the government in Ontario hobbled the LCBO’s competition—restaurants and bars—in an effort to boost their revenue and profits.

A tweet by operator and author Jen Agg regarding the timing of the partnership read, in part, “It is timed to UNDERCUT restaurants that are already bleeding out. It is timed to benefit companies that DONT NEED ANY HELP! It is timed to devastate restaurants and they damn well knew all of this.” (Emphasis Jen Agg’s.)

While the “pause” of the LCBO-SkipTheDishes partnership is a victory of sorts, countless operators—and likely customers and other small business supporters—would like to see this arrangement permanently dissolved. Several tweets have mentioned that the LCBO has increased profits during the pandemic, while others have pointed out that the Crown Corporation could help restaurants and bars by offering them wholesale pricing to reduce costs.

For now, operators in Ontario will need to keep their eyes and ears open, remaining vigilant should the LCBO and SkipTheDishes press play on their deal again.

Photo by Talha Atif on Unsplash

December 3, 2020by David Klemt David Klemt No Comments

Competing Stimulus Plans Fail to Include RESTAURANTS Act

Competing Stimulus Plans Fail to Include RESTAURANTS Act

by David Klemt – 12/3/2020

Talk out of Washington, D.C., about yet more stimulus relief package negotiations is making one thing starkly clear: We’re on our own.

There’s no help coming, not from the federal government.

Unfortunately—but perhaps unsurprisingly—it appears the bipartisan support the RESTAURANTS Act received in Congress was an exercise in optics. The result? Fleeting hope.

Without a signature from the president, it doesn’t matter that Congress voted to pass a revised HEROES Act two months ago. Lest anyone forget, the last time a meaningful Covid-19 relief package was signed by the current president on March 27 of this year.

Another way to put that is that our elected officials haven’t managed to pass a stimulus package signed into law for 251 days. They did, however, find the time for a week-long recess for Thanksgiving.

It was announced just two days ago that a bipartisan group of congresspeople and senators had negotiated a $908 billion stimulus package. The intention was to strike a middle ground between Majority Leader Mitch McConnell’s (R-KY) desire for a $500 billion package and House Speaker Nancy Pelosi’s (D-CA) proposed $2 trillion-plus bill.

Yesterday, multiple sources reported that the $908 billion—which apparently didn’t include the RESTAURANTS Act—was dead on arrival.

Of note, at least to me, is that Senator Mark Warner (D-VA) is reported to have mentioned that this week’s touted bipartisan package had been negotiated “over pizza or pasta at people’s houses.” I have to wonder if the pizza or pasta was prepared, provided and delivered by restaurants that are among the hundreds of thousands facing permanent closure if the government doesn’t actually act in a meaningful way.

Treasury Secretary Steven Mnuchin, on his way to a House committee meeting, reportedly said, “The president will sign the McConnell proposal that he put forward yesterday, and we look forward to making progress on that.”

From what I was able to glean, the RESTAURANTS Act isn’t included in McConnell’s bill either. Neither are stimulus checks nor a federal boost to unemployment insurance payments. Supposedly it does include an extension of the problematic Paycheck Protection Program (PPP); liability protection for schools and businesses; and a $332 million grant for theaters and live venues.

If the tone of this article comes across as angry, I freely admit that’s an accurate assessment. The RESTAURANTS Act was first introduced to Congress on June 15. Elected officials have had 171 days to help the hospitality industry.

The industry that employs more than 16 million people—11 million of which are employed by independent restaurants. The industry that generates well over $760 billion in annual sales. The industry that accounts for 3.5 percent of America’s GDP. The industry that has for years provided venues, food and drinks for elected officials’ countless re-election campaign fundraisers.

The industry that, should tens or hundreds of thousands of restaurants close their doors permanently, will shed millions of jobs that will not return.

And that’s just what’s happening to the industry in the United States. The industry is similarly at extremely high risk for irreversible devastation in Canada and throughout the world.

So, yes—I’m angry. I’m angry that the millions of jobs and hundreds of billions of dollars this industry contributes just to America apparently don’t mean much to government officials.

I suppose I can only blame myself for holding out hope that the RESTAURANTS Act would be signed into law. After all, the president, speaking about restaurants back in March, said, “they’ll all come back in one form or another,” adding, “It may not be the same restaurant, it may not be the same ownership, but they’ll be back.”

They won’t be back. We’ve already suffered permanent closures. There was no prescience—or empathy—in the president’s statement. Let me make this clear: I’m not laying all of this solely at his feet. America’s politicians on all sides have failed the hospitality industry and therefore millions of Americans.

Restaurants, bars, lounges, nightclubs, hotels… This is an industry that consists of incredibly resilient people. There comes a point, however, that even the most resilient need help.

As hospitality professionals fight to return to their feet, bloodied and battered from countless blows, it doesn’t seem that the government is in their corner. Nothing would make me happier than to be proven wrong, but we’ve been at this crossroads for months now.

Image: Caleb Perez on Unsplash