Eateries facing tough choices
New 25% capacity not viable, say restaurateurs
“It has been a really tough year.” That’s how Kelcie Zepatos, who owns The Arcade with her husband, Jeff, described 2020.
And it might be an understatement for the Memphis restaurant community.
The latest challenge for restaurants in Shelby County: a new directive from the Health Department that limits indoor dining capacity to 25%. The directive, in response to rising coronavirus cases, takes effect Saturday and runs through Jan. 22.
“How do you decide who to let go when you appreciate every single person?” Zepatos said. “When you care about every person?”
She said the new capacity restrictions make running a restaurant a numbers game.
“What are your fixed costs? And can you actually make money?” she said. “It’s going to take all of us coming together and working hard in order to find any sort of success over the next few weeks here at The Arcade.”
Rizzo’s owner Michael Patrick is also looking at his numbers. His restaurant traditionally seats 98, with more than a dozen of those seats at the bar. Now that his bar is closed and seating will be limited to 25% capacity, he can only open a total of five four-top tables. In February, he had 22 employees. Now he has only 12 — he’s afraid
he may have to let two or three of those go.
“I really want to stay open,” he said, adding he knows that is not a profitable decision. He is hopeful that takeout and the new take-and-bake line of meals he has at Cordelia’s Market will help his bottom line.
“Our objective is to pivot again and refocus on to-go,” Patrick said. “The good news is we had to do it this spring. We now have a reference point and can do it better.”
South of Beale owner Ed Cabigao said the new directive feels “kind of like a slap in the face.”
“It feels like they think they are ‘throwing us a bone’ by giving us some capacity. But what it actually does is force us to run up our operational costs for the minimal guest counts we can bring in,” Cabigao said. “It’s almost like they are trying to force restaurants to close dining rooms without actually saying it.”
Cabigao said he understands there is a lot of pressure on the Health Department to act. “I completely support any and all measures we can take to relieve the hospitals and slow the spread. It just feels like restaurants are being targeted without much data to back it up. And we’re definitely not being heard.”
Cabigao plans to keep the dining rooms at both his locations open and is hopeful that takeout will make up the difference. His 75-seat Downtown restaurant is now limited to 19 seats, and the restaurant needs at least four employees to operate.
“They took our hope away,” River Oaks owner Jose Gutierrez said when asked about the latest directive. He will keep his East Memphis restaurant open through the holidays, but close after New Year’s Eve for a week. River Oaks will reopen Jan. 8.
He explained that restaurants traditionally work on low profit margins. “At 50% we were holding on but losing money. This 25% is insane.
‘We are all in this together,” he added, saying he hopes Memphians will do what they can to help stop the spread of the virus. “We have no choice but to stay open through this.”
Some restaurants chose not to open dining rooms when capacity limitations were first mandated earlier in 2020. Takeout has been the key to survival.
Cassandra Pye considers her restaurant chain “one of the lucky ones.” Her family’s Southern Hands chain of homestyle Southern cooking restaurants has done fairly well with the takeout model. The dining room at only one of their five locations is open; the rest are doing takeout only. “We decided early on we didn’t want to deal with the headaches of the restrictions,” she said. “I feel for the many restaurants that need that dine-in business.”
Buckley’s Lunchbox is another restaurant that made the choice to pivot to takeout only rather than reopen its dining room when the 50% capacity limit was implemented. “At 50%, we would have only had 10 tables. At 25%, we’d only have five tables,” coowner Jeff Fioranelli said. The East Memphis restaurant now has a “Take-and-wave” carryout only menu. He said it was the only viable option for the business.
In anticipation of the new health directive, many restaurants chose to close their dining rooms on their own.
“The most recent surge in this pandemic has launched the state of Tennessee into the new COVID epicenter of the world. As we continue to navigate our way through this pandemic, I will continue to maintain the health and welfare of my staff and guests as my top priority,” said Tsunami owner Ben Smith when he announced his dining room closure on Dec. 17. “To that end, I have made the decision to close the restaurant for in-house dining until further notice.”
His Cooper-young restaurant will focus on takeout only until he feels it is safe to reopen.
Other restaurateurs, such as Nick Scott of Alchemy, have chosen to temporarily completely shutter their restaurants.
Zepatos echoed the sentiments of many restauranteurs: “We love our employees and our customers. Our Memphis restaurants want to be here when this is over.”
Jennifer Chandler is the Food & Dining reporter at The Commercial Appeal. She can be reached at jennifer.chandler@commercialappeal.com and you can follow her on Twitter and Instagram at @cookwjennifer.