The coronavirus lockdown has brought many changes to how organizations, including restaurants, are run, but when it is all over, what would the situation of mom and pop restaurants be like? Will mom and pop restaurants survive the COVID shutdown?
A report showed that mom and pops are about 90% of all the restaurants in the United States. Another report by Indies showed the following about independent mom and pop restaurants:
The coronavirus outbreak has hit many industries. Financial institutions have recorded stupendous losses; some world economies have started to experience inflation, and the restaurant industry has also recorded a whopping loss of $25 billion in sales and 3 million jobs in March.
And that’s why it’s becoming a big cause for concern whether mom and pops will survive the COVID shutdown. Seattle chef Eric Rivera, who started Addo restaurant some years ago, stated that “Many mom and pop restaurants will probably die.”
He attributed it to the fact that most independent restaurant owners lack the drive and doggedness to fend for themselves. According to Rivera, “It sucks. There’s not much help at all for these independent restaurant operators unless they’re fending for themselves like I am…”
Rivera said about himself that, “If I must drive around to sell instant ramen out the back of my car, I’ll do it…” But what is the fate of other independent restaurant operators that don’t have such a staunch doggedness as Rivera?
Before the coronavirus pandemic, most mom and pops were already tending towards being extinct, mainly because the competition among restaurants was at its peak, and the tougher and more capable ones were ruling the industry.
Moreover, most mom and pops are based on experience, which will never suffice in the long run. The senior principal of Technomic, David Henkes, said, “We usually talk about restaurants competing on convenience or experience.
“Most independent operators are experience focused, and those are the ones getting beaten right now because you can’t offer a dine-in experience. You’ve got to diversify and have an outlet if something like this happens again.”
There have been restricted movements due to the COVID lockdown, and this has made some restaurants to take the initiatives of take-outs, restaurant chains, and delivery services to remain relevant and make profits.
But for many mom and pops, this model of operation is rather too expensive. Rivera, for example, said he operates “10 different restaurants in one space.”
Rivera added that he also runs “A grocery operation that sells seafood, meat and pantry items; a three-meal delivery package; a wine club; and a charitable, pay-after-satisfaction offering.” He also added that “A former catering van is now his delivery vehicle.”
There will also be many changes in the way mom and pops operate. According to Robyn Matarazzo, the co-owner of New York-based Villaggio Italiano restaurant, an independent restaurant operator said she would take out 30% of her tables even if no one instructed her to do so.
It is also quite annoying that rental corporations won't reduce the prices of shops despite knowing that sales are low during this lockdown. This is also a cause for worry for many mom and pops, who would most likely stop operating instead of putting up with such stupendous payments.
What would have been a beam of hope for some independent restaurants is the $2.3 trillion US government-allocated funds for small businesses with less than 500 workers, to help them keep up for at least two months.
Before those at the lower end of the ladder – mom and pop restaurants and other extremely small businesses – ever benefit from the funds, companies and chain restaurants with more resources would have pushed their applications forward.
Jared Bernstein, economist at the Liberal-leaning Center on Budget and Policy Priorities, said that, “more giant enterprises would quickly get loans that will be allocated on a first-come, first-serve basis than smaller enterprises".
She added that “Eventually, it’s going to be difficult to figure out how to help the smallest and most vulnerable businesses.”
When the COVID shutdown is over, there will be fewer mom and pops still operating. According to David Henkes, most independent restaurants will be badly hit by COVID-19, and up to a quarter of them will likely not survive the effects of the pandemic.
Because most employees have been sent away to stay at home during the COVID shutdown, it is very likely that such employees would opt for other jobs and may never come back to these restaurants. So, we expect a shortage of employees after the pandemic.
Most mom and pop customers would have been won over by other chain restaurants that have been meeting their needs through services like take-outs, food delivery, off-premise, and catering. Sadly, many mom and pops would have lost their most loyal customers.
The pandemic isn't favorable for any organization, as David Henkes said, “None of the restaurant chains will come through unscathed…" Still, it may have a worse effect on mom and pop restaurants, mainly because of undercapitalization, poor business models, and lack of doggedness.
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