A survival plan for Texas restaurants
No industry has ever faced challenges like what we see with the food and beverage sector now. With a day’s notice, more than 53,000 restaurants, bars and similar businesses closed their doors for at least six weeks, resulting in about 700,000 jobs and over $4 billion in sales lost. National numbers tell us the foodservice industry lost more jobs than any other industry.
“I had to use a printed-out script when we laid off our employees, and my hands were shaking so badly,” said Jessica Delgado, a restaurant owner from the Rio Grande Valley. “I could barely get the words out through the tears.”
Making matters worse, restaurants now face significantly reduced sales due to occupancy restrictions and social distancing requirements. They lost valuable product due to sudden closures, their expensive business interruption insurance policies have been useless, and they’re struggling to rehire employees. And most recently, they face a growing meat shortage and increased prices.
Despite the uncertainty, Texas’ restaurants, bars and other foodservice businesses continue to exhibit remarkable resiliency and dedication to their customers and employees.
In Houston, Ricardo Molina runs the two locations of Molina’s Cantina along with his two brothers. A third location in the Katy area is still under construction, and right now he still plans to open it within six weeks.
“We’re still here, even if we’re limping along,” Molina said with a laugh. “One day we’re a full-service restaurant, the next day we’re a ghost, just selling to-go.”
Molina said he was able to keep nearly every staff member on board, but they are only working about 30 percent of the hours they were before. Waitstaff have been retrained to manage phone orders, to-go packaging and curbside carry out.
“Our grandparents started this business in 1941, in the middle of a world war,” said Molina. “I remember my grandpa telling us stories about having to ration everything and deal with price ceilings. We’ve definitely had crazy times before, but this is unimaginable. It’s not just about profit, this just isn’t a business model you’d ever want to deal with.”
Molina points to the ability to sell cocktail kits as a life saver for his business and hopes to continue to do so in the future. However, now the rising costs of meat are a concern, and he’s seen prices jump as much as 80 percent already. There’s also the worry over rent, and an “unforgiving landlord,” as he describes.
He also says he’s concerned about his friends in the industry, knowing full well some of their businesses won’t survive.
“It’s depressing to see friends in the industry not doing well, so we reach out and text each other,” Molina said.
Despite the obstacles, the hospitality spirit and Houston pragmatism runs deep with the family.
“Nobody’s breaking down, we’re just getting with it,” he said. “Come hell or high water, we’re not going to stop.”
Down in McAllen, Larry and Jessica Delgado run the Delgado Collective, three highly acclaimed restaurants in the border city.
“This community embraced us from day one,” said Chef Larry Delgado. “We were told that we couldn’t make it, that no one would be able to afford to eat at our restaurants, and we trusted this community to lift us up. Going through this disaster together, even as we’re losing money, we knew we had to keep lifting our community up, too.”
The Delgados sprang into action after their dining rooms closed, implementing curbside ordering and doing their own delivery.
“We can’t afford the fees from GrubHub and those guys,” said Delgado. They also sell cocktail kits and even offer affordable family meals much lower than the cost of their normal entrees. Every package to-go includes a handwritten thank you note.
“We are filled with gratitude every day,” said Jessica Delgado. “We are alive, we are healthy, and our businesses are open. When people choose us, we have to share that gratitude.”
Pre-pandemic, the Delgado Collective had 120 employees. Now they are down to just 43 to operate all three restaurants.
“This has been a punch to the gut. We didn’t foresee a seven-week shutdown; we thought it would just be a couple weeks and we could figure it out,” said Jessica Delgado. “This has been much longer and more difficult than any of us could have imagined.”
Despite the hardships, the Larry Delgado says they have been able to keep their spirits up. “God knows there have been dark days. But people see us as pioneers in this community. Eating food is one of the most intimate things you can share, and people trust us.
There’s an expectation that we are going to do it right. I’m not sure how we are going to survive this, but we’ll do whatever it takes.”
Texas’ restaurants have always been there for us, and now they need us to be there for them. Unless we get food and beverage businesses the help they need to make up for over six weeks of lost revenue and product, we estimate as many as 30 percent of our restaurants will close for good.
Thankfully, Texas can prevent this crisis. The Texas Restaurant Association is launching the Texas Restaurant Survival Plan — an eightpoint plan that leverages direct aid with the policy reforms that Texas’ food and beverage businesses need to survive the economic fallout from COVID-19 and government-mandated closures. For example, the Texas Restaurant Survival Plan includes a Foodservice Industry Recovery Fund to help local businesses adapt and become profitable again in the post-COVID market, a health and sanitation training program, regulatory waivers to allow for more alcohol to-go sales and tax relief.
To fund the plan, the Texas Restaurant Association calls upon Gov. Greg Abbott and the Texas Legislature to set aside $390 million, a relatively small portion of the over $6 billion the state will receive from the CARES Act, to help one of the state’s largest and hardest hit industries. Now is the time to send taxpayer-funded aid to businesses that are ready to spend it to grow the economy by rehiring employees, paying rent and purchasing supplies.
Restaurants and bars have always been about more than food or business. They are pillars of our community that reflect our diversity, our love of family and friends and the way we value service. Now is our chance to repay their service by protecting the restaurants and bars we love.