HUNGER PAINS
COVID-19 TAKING DEVASTATING TOLL ON RESTAURANTS
Brick & Brew, with restaurants in Havertown and Media, has had to cut its staff in half because of the limitations put in place due to the pandemic - and it may be one of the lucky ones. Experts saying anywhere from 40 to 60 percent of Pennsylvania restaurants will have to close because of an inability to survive coronavirus restrictions.
Prior to COVID-19, the nineyear-old restaurant chain born in Delco had 200 employees.
“Going into the fall, that’s been cut in half,” Marc Dent, Brick & Brew’s regional director of marketing, said, adding that whoever’s left has taken a substantial pay cut. “We have staff that have been with us for a very long time. We’ve created our own in-house slush fund to help them pay rent, if needed, to help them with food ... But, again, you can only do this for so long in the current environment.”
After coronavirus appeared in Pennsylvania in early March, Gov. Tom Wolf shut down indoor dining for restaurants on March 16. Take out and delivery was still permissible but thousands of workers were impacted.
That remained in place for months until June 5 when outdoor dining was permitted, as cases of the virus had significantly dropped. By the end of June, as Pennsylvania counties moved to the Green Phase, indoor dining was permitted at 50 percent of fire capacity standards.
Then, on July 15, the governor issued new guidance, limiting indoor restaurant seating to 25 percent and on Tuesday, he extended the emergency declaration for COVID-19 for another 90 days.
His office said the emergency extension allows for increased support to state agencies, expediting supply procurement and the lifting of certain regulations for efficiencies, such as the waiver of a one-week waiting period to receive unemployment compensation.
“We are going to continue to combat the health and economic effects of COVID-19 and the renewal of my disaster declaration will provide us with the resources and support needed for this effort,” Wolf said in announcing the second renewal of his coronavirus emergency declaration.
Not all agree, as evident by a statement released by Pennsylvania Republicans after a measure to end the emergency declaration failed.
“(House Democrats) have chosen to ignore the cries of their constituents in order to protect a governor who has failed the commonwealth for six painful months,” state House Republican Caucus spokesman Jason Gottesman said. “By siding with the governor, they empower him and his unelected cadre of bureaucrats to keep Pennsylvania’s economy closed, keep thousands unemployed and deny children the certainty of the best education opportunities.”
John Longstreet is president and CEO of the Pennsylvania Restaurants & Lodging Association.
Before COVID, there were 580,000 employees in the industry in Pennsylvania, he explained, adding that about 30 percent of them, or 174,000, are anticipated to lose their jobs permanently because of the crisis.
“The restaurants we talk to don’t understand it,” Longstreet said. “They’re at their wits end. Unless we get back to 50 percent very quickly, it’s going to be a bloodbath. As many as 7,500 restaurants will close permanently. It’s devastating.”
He noted 116 restaurants in the Pittsburgh area have already shut their doors forever.
Longstreet said WalletHub listed Pennsylvania as the second-most restrictive state in the United States regarding coronavirus guidelines.
“It makes no sense,” he said, adding that restaurants in 26 states in the country are open at full capacity. Longstreet said only Illinois and New Mexico stand at 25 percent capacity with Pennsylvania.
“It’s going to put restaurants out of business,” Longstreet said. “Restaurants that temporarily close, 60 percent are not reopening.”
He added that restaurants were starting to get glimmers of optimism when indoor capacity went to 50 percent. Then, it was pulled back to 25 percent.
“It really took the hope that restaurants were beginning to feel ... and crashed that hope,” Longstreet explained. “It’s the equivalent of closing a restaurant.”
The virus, he said, responds to social distancing and knows nothing of fire codes.
He said the industry appreciates the various forms of financial aid that have come their way, but it’s not enough.
“The reality is there’s not enough money in the state of Pennsylvania to save the restaurant industry,” Longstreet said. “The most important thing they
“The restaurants we talk to don’t understand it. They’re at their wits end. Unless we get back to 50 percent very quickly, it’s going to be a bloodbath. As many as 7,500 restaurants will close permanently. It’s devastating.” — John Longstreet is president and CEO of the Pennsylvania Restaurants & Lodging Association
need is to get reopen again.”
Dent agrees and shared what it’s been like for a local restauranteur with locations in Havertown, Media and Malvern.
“To be honest, it’s been a lot of pivoting and reacting to the rules that are put in place by the government officials and the county officials,” he said. “It has not been easy to say the least. We’re an easy target, frankly, as the perception is, ‘Well, we have to put in place new procedures to protect everybody from a pandemic.’
“We get that,” Dent said, however, he added, “Inside our industry, it’s an extremely competitive industry. You’re not operating with huge margins. We’re not a financial company. We still have health insurance costs ... You still have the operating costs that don’t go away. Now, we’re down significant double digit revenues because of the capacity regulations.”
Then, pile on top of that equity. “Explain to me how you’re able to have a Target open or a Walmart open,” Dent said. “It’s not a level playing field.”
The big corporations have the capability and resources to meet additional expenses, such as PPE and sanitizer among other things, and they can circumvent the rules, he said.
“We’re a small business, we don’t have those types of resources,” Dent explained. “It’s not consistent across the board. There’s no thought process that decisions that are made today how do they affect us long term? We’re more valuable to a small community than the bigger box companies. We generate more money per square feet, we have more positive impact to the community.”
Dent questioned whether the Centers for Disease Control and Prevention or other government officials were prepared for a pandemic prior to COVID.
“I think they’re making things up as they go along with loose facts,” he said.
And, all of these decisions impact their staff on a personal level.
“The uncertainty surrounding job security, business sustainability creates anxiety,” Dent said. “We have tenured professionals in the restaurant industry. It’s a very uncomfortable time. Morale stinks. I’m not going to sugarcoat it.”
He said the Brick & Brew management team meets weekly to address how they can help their team try to look across the valley of this pandemic.
Brick & Brew was able to take advantage of the Payroll Protection Program, Dent said, but there were issues with that.
“There should’ve been a set of criteria to let us implement these funds, to allocate these monies in our business model,” he said. “The issue hasn’t gone away.”
Especially, Dent said, as various expenses arise, such as the need to purchase tents for outdoor seating, which can be a fickle situation.
“The weather plays a crazy element in this,” he said, saying they have to shut down when it rains too much. “We’re going into the fall. What happens when it gets cold?”
Viability is a real, raw issue for many in the industry right now.
“Nobody wants to see anybody go out of business but the reality is probably 40 percent of the businesses aren’t going to make it through this,” Dent said.
He said he thinks Brick & Brew will make it but it won’t be an easy ride.
“As a management team, we double down on what we have to do on a daily basis to keep going, to make sure it’s sustainable,” he said. “We understand the baseline that it’s going to take for us to get through this. We’re kind of lucky, Brick & Brew has done really well ... (but) it can’t go on forever.”
Thinking of the ways Brick & Brew and other restaurants have helped communities such as youth baseball and basketball team sponsorships, Dent emphasized how small businesses have built America.
“If anything, this shines a light on the importance of small businesses ... that supports the community,” Dent said, adding that the restrictions really jeopardize that. “This is a direct attack on the fabric of America.”
“We’re a small business, we don’t have those types of resources. It’s not consistent across the board. There’s no thought process that decisions that are made today how do they affect us long term? We’re more valuable to a small community than the bigger box companies. We generate more money per square feet, we have more positive impact to the community.” — Marc Dent, Brick & Brew’s regional director of marketing