USA TODAY International Edition
Restaurant industry looks to bounce back in 2021
Businesses pivot to adjust to ‘ new normal’
In March, Scratch Food & Beverage owner Don Mahaney developed a “pay what you can” menu and local market model to help customers who had lost their jobs or couldn’t find groceries because of early pandemic shortages.
By May, he was running up the hundred- some- step staircases along Rialto Street in Pittsburgh’s Troy Hill neighborhood to raise money for safe food deliveries to needy customers.
Before the end of the year, the restaurant changed its name to Scratch & Co. and launched a retail brand, Scratch & Co. Made Brand. The goal is to cut through the global supply chain and offer locally sourced provisions such as pickles, lunch meat and sauerkraut while ensuring local farmers and commercial ecosystems have an advantage over global and national supply chains.
“If I hadn’t been taking that approach I’d be talking to you as a former business owner,” Mahaney said. “The only reason we’re still in business now is because we changed our entire business model.”
By pivoting weekly, Scratch & Co. became an outlier in the restaurant industry – a 2020 success story.
Now, as the restaurant gears up for several initiatives in 2021, the hospitality industry as a whole sits between catastrophe and recovery.
When the pandemic hit in March, few believed it would last as long as it has. It forced restaurants – an industry accustomed to pivoting – to either take a pragmatic approach or an innovative one.
Some fine- dining restaurants such as The Left Bank in downtown York, Pennsylvania, opted to close before the initial shutdown. Ride this out in the short term and sort out the damage later.
Others, such as Scratch, overhauled their menu and concept. “One of my goals was to keep my people employed,” Mahaney said.
But even before the stay- at- home orders hit, restaurateurs swiveled in any and every direction. Patreon accounts were created, GoFundMe campaigns were launched, and distilleries stopped making alcohol just for our gullets.
The beginning stages of the pandemic saw Michelin Star restaurants stop serving $ 75 plates and opting to serve $ 35 takeout – just to keep the lights on. Some, such as Alinea in Chicago, have found a way forward. Other nationally recognized restaurants such as the Gotham Bar & Grill in New York haven’t been so lucky.
The fallout of the pandemic has shown that while some restaurant owners may have the savvy to keep pivoting, the industry remains in choppy waters and, in some aspects, is on the verge of capsizing.
John Longstreet, president and CEO of the Pennsylvania Restaurant & Lodging Association, expects that the “new normal” will see more than 50% of restaurants close. The restaurant spaces are likely remain vacant, unlike the past when a new eatery may have appeared.
“Banks will be less likely to provide loans for restaurants in states like Pennsylvania with the threat of more government shutdowns and capricious mandates forcing them into bankruptcy,” Longstreet said. “Boarded- up spaces will be particularly prevalent in downtown areas, where restaurants are typically the lifeblood of revitalization, so we can expect increased urban blight, crime and mass exodus, like we are seeing in New York City.
Instead, without foot traffic, lovable watering holes leave the communities where they’ve become staples over decades.
In other communities, such as Delta in southern York County, Pennsylvania, a single restaurant such as Delta Pizza can find a way to survive.
Delta Pizza has built a reputation by paying it forward, though in a time of pandemic the lack of competition around Delta ( a town with fewer than 1,000 residents) may help, not unlike the way Scratch found a way to sustain itself and become a resource for its community.
Longstreet expects corporate travel, which has historically been customer fodder for fine- dining restaurants, will not return to pre- pandemic levels. He expects to see a decline by at least 10% even after business returns to normal.
Continued mandates and restrictions on gatherings pose additional risks for a return to normal in states such as Pennsylvania where executive orders have come in greater frequency, he said.
“On the positive side, states like Pennsylvania, within driving distance of major population centers, will receive a quicker return of leisure travel,” he said, adding that the state saw an initial bump in the summer of 2020 before additional stay- at- home orders came.
In the in- between areas, such as York or Harrisburg, Pennsylvania, the direct competition may hurt smaller businesses because the local population size may not be large enough to contribute to a takeout- only model.
“The survival part doesn’t much alter our path from most of 2020,” said Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association. “We’ll be working to gain financial help for the industry, and as distribution of the vaccine picks up its pace, we’ll push for a return of certain business rights such as the ability to seat patrons at bar tops.”