As if the coronavirus pandemic has not already been hard enough on restaurants, many of them are facing a new wave of restaurant restrictions, providing a dangerous hurdle for those still recovering and trying to stay afloat.
According to a John Hopkins University analysis, just this past Thursday, COVID-19 cases in the United States hit 88,251, a record high.
“We’re starting to find ourselves on a steep slope of the epidemic curve, so I think you’re going to see cases accelerate,” says Dr. Scott Gottlieb, a former Food and Drug Administration Commissioner.
“There are about 15 states where the positivity rate’s above 10%, the reproduction number is greater than 1 in all 50 states right now.”
The positivity rate shows the number of coronavirus tests that come back positive while the reproduction rate shows the ability of COVID-19 to spread. The numbers show a serious increase in the coming months.
Many areas throughout the country have had to reimpose dining restrictions to slow the spread. Just this past Friday, restaurants in Chicago were banned from having indoor dining. The restaurant capacity in Denver has been reduced from 50% to 25%. 10 pm is now the last call for alcohol.
European countries, which are also facing a second infection peak, are implementing new dining restrictions again as well. In France, businesses deemed non-essential, such as restaurants and bars, are temporarily shutting down. Starting November 2nd, bars and eateries in Germany will close for another month.
As the pandemic has reached further and further into 2020, restaurants and employees are now awaiting another federal government stimulus check. The Paycheck Protection Program loans, which were given to eateries in the past few months, have completely run out.
The 7.9% unemployment rate means that consumers don’t have the same ability to dine out as they used to.
Independent establishments are having a hard time bouncing back like chain restaurants. Unfortunately, the inability to forecast a recovery time from the COVID-19 surge makes planning even more difficult.
Just this past Thursday, Starbucks said that 63% of its cafes around the United States have cut back on seating. The company expects a return to full sales by March of 2021 assuming that the cafe seating and hours of operation are back to normal as well.
As colder weather approaches, restaurants that have relied purely on outdoor dining will take a hit in sales. For example, the Cheesecake Factory, a restaurant with complete reliance on outdoor dining during the pandemic, fell victim to a stock downgrade in August.
For fast-food restaurants, however, the new restrictions have been much easier. With low prices and reputations based on convenience, the sector rebounded much quicker than the entirety of the industry. Taco Bell is a wonderful example, as the Mexican fast-food chain saw a massive increase in the third quarter compared to last year with over 30 million more customers ordering via drive-thru.
Wingstop has seen a sales surge during the pandemic, though its dining rooms have been closed for almost eight months. Rather than relying on dining, the chain is relying on food delivery and tech investments.