Delaware’s restaurant industry has been one of the hardest hit in the nation and is projected to suffer significant losses for the next six months.
According to newly-released national labor data, more restaurant jobs have been lost in Delaware than any other state in the country except New York and Vermont amid the Covid-19 shutdowns.
“Can you even imagine? This is a dire situation for our local restaurants,” said Delaware Restaurant Association President and CEO Carrie Leishman.
The National Restaurant Association data comes from the Bureau of Labor Statistics. Their report says that Delaware lost 66% of its eating and drinking place jobs between February and April, and it ranks Delaware third in the country for losses.
Delaware’s restaurant trade association group also says the financial impact has also been devastating. Between March 15 and June 15, Delaware lost $472 million in annual restaurant sales, according to the Delaware Restaurant Association. And the trend continues as some restaurants remain closed and others are operating well below capacity.
A driving force in Delaware’s economy, restaurants have lost nearly three times more jobs than any other industry due to the pandemic.
“It’s really a sting. It goes to show you the value and impact that restaurant jobs have on the state of Delaware’s economy,” says Leishman. There are about 1,900 restaurants in the state.
This comes at a time when Delaware usually boasts the third-highest (by percentage) increase in summer jobs, according to the DRA, because of the large numbers of beachgoers and seasonal tourism throughout the state.
I would say in the next six months, watch out
Leishman worries both about restaurants that may permanently close as well as those operating well below dine-in capacity.
“My real fear is once the bills come due — the mounting debt that they now have to pay — or their lease comes due and when they realize that under these strict capacity guidelines, they just can’t operate profitably, that they won’t renew their leases. So, I would say in the next six months, watch out,” said Leishman.
Leishman says her organization’s data shows that 75 percent of restaurants will operate at a severe financial loss through December. “There’s just no way they can do well right now. And for those that are still closed, we hope some of them will come back,” she said.
House votes to continue to allow curbside sale of alcohol so restaurants can recoup losses
The Delaware House of Representatives on Thursday passed a House Bill 349, which would allow restaurants to continue alcohol with takeout and curbside service into 2021 to help recoup losses.
They also passed an amendment that would lift the regulation that requires a full meal to be ordered with alcohol and that alcohol would be no more than 40 percent of the total bill. That amendment is designed to make it easier for taprooms to provide takeout because they typically offer fewer food choices. That bill will go to the Senate for a vote.
The goal: Restoring indoor dining capacity to 100 percent
Leishman says she is happy many people are supporting local restaurants by ordering food to go or dining in when they can find a table. But her organization says it’s important that restaurants be allowed to operate at 100 percent of fire code capacity as quickly as possible.
“If you think about it, our elected officials think things are great — we allowed [restaurants] to reopen. But you have to understand that we had mounting debt. We’re not 100% able to reopen.
“And it’s not even the capacity, this 30/60 percent. Our biggest challenge right now, and what we’ve tried to engage our elected officials about in the governor’s office, is the whole restriction regarding the six to eight-foot spacing of tables,” says Leishman.
According to DPH guidelines, people are to keep six feet of distance from others, but restaurants are required to maintain eight feet between tables. “That has been the hardest, and it’s kept 25% of our Delaware restaurants closed in the early phases.
“I have little restaurants [as members of the DRA] in nooks and crannies and historical areas, many with unique floor layouts, that can’t operate on seven tables. It’s confusing, and it’s overly rigid,” said Leishman. “Everything that the Governor and the government have said they’ve given us is just a band-aid for the real problem.”
Table spacing #1 concern among Delaware restaurants
A recent survey of Delaware restaurants reveals that the number one challenge for operators to either reopen or reopen successfully is around the strict guidance on table spacing.
“That is a real problem. We are not a one size fits all big-box store. So you can’t work our model based on 30 percent or 60 percent capacity. We have spaces with fixed booths, spaces with nooks and crannies, and we have historical properties,” said Leishman.
The DRA member survey of more than 100 restaurants showed current top priorities and concerns for restaurant operators:
- Capacity increasing to 100%
- Removing the table spacing restrictions (‘social distancing’ between tables)
- Removing the bar seating/service restrictions
- Removing the face coverings requirements
Leishman says that the local reality is the same as national projections — that 20 percent to 30 percent of Delaware restaurants will permanently close due to the prolonged full and partial closures during the pandemic.
Who do we want to be?
If some restaurants are forced to close, Leishman says here’s what will happen: Your favorite neighborhood restaurant will disappear, and a convenience store will take its place.
“So I think the state has to ask itself, who do we want to be? Do we value those local neighborhood restaurants that connect our communities? Or do we want to replace them with big box stores and convenience stores? And I think that we cannot be treated as one under these guidelines, because that’s, who’s going to end up in its place,” she said.