2020 was a brutal year for restaurants. In the wake of the pandemic, an estimated 110,000 dining establishments closed on a permanent basis, and in the absence of adequate aid, more risk a similar fate this year, especially given the number that are currently open in limited capacity.
Of course, to stay open at all, restaurants need their workers to be able to show up to do their jobs. And given the relative risk of working in a dining establishment, the National Restaurant Association has requested priority for food service employees to get a coronavirus vaccine.
Currently, restaurant workers are grouped into phase 1c of the CDC’s list of individuals who can move to the head of the line. That means they’re behind healthcare and essential workers but ahead of the general population.
Given the limited supply of vaccine doses available today, it’s questionable whether restaurant workers will get to further jump the line. And even if they do wind up getting priority, that may not be enough to save restaurants from going under.
Capacity limits are killing restaurant profits
Over the past year, many restaurants have had to shift their strategies in the absence of being able to open their indoor dining rooms in full. For some, that meant building out additional outdoor seating. For others, it meant pivoting to takeout, delivery, meal kits, and virtual cooking classes.
Some restaurants have done reasonably well with the circumstances they’ve been dealt. But moderate and high-end eateries are taking a hard hit. These establishments can, in normal times, get away with charging substantial markups on gourmet entrees and alcohol. Capacity limits, however, are shrinking those profits, and most people aren’t ordering fancy steaks and martinis to go. Furthermore, while restaurants located in warm climates may be faring decently with outdoor dining during the winter, those in areas where snow and freezing temperatures are the norm may be having a hard time drawing in al fresco diners.
Plus, the cost of offering outdoor dining in a harsh climate can be exorbitant enough to negate whatever added revenue it generates. From high-powered heaters to tents to igloos, some restaurants have already sunk a fortune into their outdoor setups only to find that they’re still starved for revenue in the absence of full indoor dining.
As such, while vaccinating restaurant workers might give those who own those establishments more peace of mind, it won’t necessarily do much to help eateries from a cash flow — or survival — perspective. Right now, restaurants aren’t struggling because their staff members are dropping like flies; they’re struggling because they can’t welcome diners like they normally would. And until enough vaccine doses become available to inoculate the general public, their plight is likely to continue regardless of where their own workers fall on the vaccine hierarchy.
Of course, that’s not the best news for commercial landlords, who rely on restaurants to pay rent and can’t afford to lose tenants at a time when new businesses aren’t exactly rushing to open. There’s a good chance that things will start to turn around for restaurants later in the year as more people become vaccinated and restrictions begin to ease up. Whether they can hang in until that point is the big question.