The Register Citizen (Torrington, CT)
Rough road for Connecticut restaurants
Eateries stay afloat, but experts see next 3-4 months as critical
A year ago, the Dog Lane Café in Storrs turned a profit. In the past three months, it has lost about $100,000.
The establishment is surviving despite the shutdown of the nearby University of Connecticut’s main campus amid the coronavirus crisis — in large part because its owners tapped into all their lines of credit and government aid such as the federal Paycheck
Protection Program to help stay afloat.
But the business might not be able to hold out if the UConn campus does not resume regular operations in the next school year.
While most restaurants across the state have managed to stay in business despite the massive job losses that have rocked their industry, the longterm prospects for many remain ominous. The return of sit-down dining and municipal programs have helped to boost revenues, but many eateries will be hard-pressed to return to the slim profit margins they recorded before the pandemic as they grapple with fewer seats, burgeoning costs and uncertain customer demand.
“People who were barely making it in normal times simply cannot withstand this. They’re going to fold up their tents,” said Brian Jessurun, coowner of Dog Lane Café and three other restaurants in eastern Connecticut. “If you’re not making a living at it and killing yourself in trying to do this, then what’s the point? We’re going to see a lot of attrition in the independent restaurant arena.”
Major disruption
In Connecticut, leisure and hospitality’s employment rolls have been decimated in the past few months. Accommodations and food services lost nearly 58,000 positions in the state in April — about half of the state’s entire job loss in its 2008-2010 recession.
Some restaurants have already succumbed to the crisis. In Stamford’s South
End, a Dinosaur Bar-B-Que has permanently shuttered its approximately 7,500square-foot establishment after an approximately seven-year run.
“It was a very large restaurant and when COVID-19 hit it was no longer financially viable to keep it open,” said a spokesman for Dinosaur.
Among other shutdowns, Italian bistro chain Brio has closed its restaurants at the Danbury Fair mall and in West Hartford. Its new owner has not signaled that it plans to re-open either location.
Officials at the Connecticut Restaurant Association do not have an official count of how many restaurants have closed permanently during the crisis. But they are continually receiving calls from foundering establishments who see shutting down as a last resort.
“What you have to understand too is these businesses are going to do everything they can to survive and come out of this,” said Scott Dolch, the CRA’s executive director. “They want to figure it out. They’ve put their blood, sweat and tears into their businesses.”
Gradual reopening
The return of outdoor dining on May 20 has helped eateries to generate more demand, although many still rely on pickups and deliveries to keep their businesses going.
Indoor dining starts up again Wednesday, with the condition that restaurants operate at a maximum of 50 percent of their regular indoor seating capacities.
“The state has been pretty good about their process, and it seems to be a very cautious opening that residents feel safe to follow,” said Victor Mathieu, coowner of the Fiesta Peruvian restaurants in Norwalk and Stamford. “It's more the logistics of working out all of the small details, such as allowing road closures so that we can do outdoor dining.”
A number of cities and towns in Connecticut such as Stamford, Norwalk and Greenwich are trying to help restaurants increase business by sectioning off parts of or entire streets for expanded outdoor dining.
“Although it accounts for only a portion of their previous profits, we are hearing that restaurants are benefiting,” said Marcia O’Kane, CEO and president of the Greenwich Chamber of Commerce. “This pandemic is unprecedented, so
we hope that restaurants can withstand this incredible challenge.”
Some restaurateurs said they would benefit from more information from Gov. Ned Lamont’s administration about the third stage of re-opening, which is to follow this week’s return to limited indoor seating. A finalized start date for that phase has not been announced.
“What does phase three look like?” said state Rep. David Rutigliano, R-Trumbull, who is also a partner in the SBC Restaurant Group, which owns and operates Southport Brewing Co., Local Kitchen and Beer Bar and the Sitting Duck Tavern. “We’re trying to adapt and comply, but it would be good if we had a little more time, a little heads-up.”
The launch date and other details about the third phase should be announced within the next couple of weeks, said David Bednarz, a spokesman for the governor.
Matt Storch, owner of Match in Norwalk and Match Burger Lobster in Westport, said he would like to see some of the physical distancing regulations loosened in the third phase.
“I would probably minimize and reduce the spacing between tables. I think
3 feet or 4 feet would make it a little more realistic,” Storch said. “I don’t think masks are going away any time soon, but I would like that to go away. I don’t think employees in the kitchen who have been with each other for such a consistent amount of time need to wear masks in front of a [hot] stove.”
Uphill battle
Even if Connecticut keeps advancing with a reopening plan and does not get hit in the fall by another surge of coronavirus cases, the daunting challenges for restaurants will not soon abate.
Unless later stages of the reopening allow for full or nearly full seating capacities, many establishments will continue to struggle to break even.
At the same time, restaurants are grappling with escalating expenses to cover personal protective equipment and other measures needed to comply with regulations on sanitation and social distancing.
For restaurateurs like Jessurun, those pressures are forcing difficult decisions. In addition to Dog Lane Café, he also co-owns 85 Main in Putnam, Fenton River Grill in Mansfield Center and Vanilla Bean Café in Pomfret.
“We’re going to have to
raise our prices at Vanilla Bean, and we’re probably going to be raising prices across the board because the cost of producing the product is going to go up at least 6 to 10 percent in just the labor side of things,” Jessurun said. “That doesn’t include all the packaging material we had to use and the amount of printer ink and paper for one-time-use menus. Our costs of pushing this product out have gone up a lot.”
In addition, many restaurants could find themselves without enough capital after they have exhausted funds from measures such as the Paycheck Protection Program. President Donald Trump signed into law on June 5 legislation that extends the period for spending PPP money from eight weeks to 24 weeks.
“The real reality of where our industry sits in making it is probably going to be over the next three to four months,” Dolch said. “They’re now going to try indoor dining in some capacity and they’re going to see whether they can survive.”
Compared with the federal government, state officials have far fewer funds to disburse. But they have tried to help small businesses by launching initiatives that have provided tax, mortgage and rent relief and bridge loans.
“There is still much more work to do to support small businesses who are struggling during this difficult time,” said state Rep. Caroline Simmons, DStamford, who is co-chairwoman of the Legislature’s Commerce Committee. “We need to expand low interest loan programs for small businesses, in particular for women and minorityowned businesses, we need to extend tax, mortgage and rent relief and we need to provide workforce development and job training opportunities for individuals that have lost their jobs.”
Increased government support, however, will not necessarily reassure customers who might be skittish about eating out while the threat of contracting the virus still looms.
“None of this works if people don’t have confidence to come back out,” Rutigliano said. “It’s important that we get it right, that the government gets it right. We’re in a disposable-income business. People don’t have to come to our places. We must make them feel comfortable and healthy.”