The coronavirus pandemic is dividing the food venue industry into two: large, well-capitalized chains like Chipotle Mexican Grill Inc. and Domino’s Pizza Inc. are gaining consumers and adding outlets, while tens of thousands of places to eat locals are going bankrupting.
Large traders sometimes have the benefits of more capital, more leverage over rental conditions, more physical space, more geographic flexibility and previous experience in service driving, production and delivery. to tackle the pandemic more than smaller rivals, reducing the ranks of traders who can become giant US employers. But it’s not the first time In the retail world, primary chains such as Walmart Inc. and Target Corp, suffering to stay open.
The gap between restaurants large and small arose in the summer. Chipotle more than tripled its online sales this quarter, while Domino’s, Papa John’s International Inc. and Wingstop Inc. recorded double-digit increases in same-store sales in the third quarter. Compared to last year, McDonald’s also reported that same-sales stores in the United States increased by 4. 6% in the third quarter, including an increase in double-digit numbers in September, its most productive functionality per month by nearly one attributed credit to drive-through and faster promotions.
Many other giant catering corporations have taken more steps to take advantage of the merit of transfer to takeaways. Brinker International Inc. ‘s Chile department has accelerated the summer debut of a delivery-only brand, Just Wings, which expects to generate more than $150 million in sales in its first year.
“What happens with this pandemic is that we’re going to get stronger,” said Bernard Acoca, managing director of El Pollo Loco Holdings Inc. , a chain of 475 Tex-Mex restaurants across the Southwest. El Pollo opened 3 restaurants in 2020 and aims to climb further in the coming years, he said.
The outlook for many independent restaurants, on the other hand, is getting dark: three-quarters of the nearly 22,000 restaurants that closed in the US are in the middle of the country. But it’s not the first time Between March 1 and September 10, they were businesses with fewer than five locations, according to the list Yelp. com.
Frequent closures have been a side of the catering. Restaurants sometimes run on low margins. Approximately 60,000 restaurants open on average each year, according to the National Restaurant Association, and 50,000 close.
But this disorder is the innerst in decades: the deal expects 100,000 restaurants to close this year. The sudden loss of many independent restaurants can permanently adjust the landscape of American cities. Some chefs and restaurateurs fear that the country’s recent renaissance of urban centers will be reversed.
Employment in restaurants and bars fell from 2. 3 million jobs to a total of more than 12 million before the pandemic, according to the Ministry of Labour. In fact, the recreational and hotel sector in total experienced the biggest overall decline in employment since February a giant industry.
The pandemic will end with $240 billion in sales this year, according to a projection by the National Restaurant Association, an industrial group. Last year, it contributed more than the agricultural, air and rail industries together, according to figures from the Bureau of Economics Analysis.
The pandemic has saved all primary chains.
Many informal food service corporations have experienced double-digit sales declines. More than a dozen corporations have filed bankruptcy coverage claims, adding Ruthrough Tuesday Inc. and California Pizza Kitchen. Shake Shack Inc. established Ruth’s Hospitality Group Inc. returned millions of dollars in federal assistance to small businesses affected by the coronavirus pandemic. Starbucks Corp. , Dunkin Brands Inc. , and Pizza Hut said they plan to close 1,500 outlets between them over the next 18 months.
However, many other channels say the time has come to take more aggressive action. above: 87% of New York’s 450 bars and clubs said in a recent survey that they may not fully pay their rent during the month of August, according to NYC Hospitality Alliance.
Starbucks, although it ends up in some locations, plans to spend $1. 5 billion in its existing fiscal year, on the component to raise 800 retail outlets in its U. S. markets. But it’s not the first time And China, accelerating the switch to restaurants that focus on money withdrawal and rear-wheel drive counters. Darden plans to spend $300 million until midway through next year, his component to climb 40 new restaurants. Papa John’s franchisee, HB Restaurant Group LLC, plans to open dozens of retail stores and Wingstop announced that he had climbed 43 restaurants in the finished quarter. In September.
“There’s no more time than now to be bold,” Wyman Roberts, Brinker’s executive leader, said in an interview.
Some consumers have already transferred more spending to restaurant chains in a plan that plans to last beyond the pandemic.
Joyce Hill, a 52-year-old professor at Akron University in Ohio, said she had more orders from Bonefish Grill and Carrabba divisions of Cracker Barrel’s Old Country Store Inc. and Bloomin’ Brands Inc. Said he intends to follow the chains because it’s less difficult and doesn’t sit dining in restaurants.
“With just a few clicks, I can order a full meal, pay for it and not have to leave my car to get it back,” Hill said. He said he recently stopped at a Mexican place to eat shrimp tacos after not visiting for months. Closed.
One place to eat that benefits from this replacement is Tabbassum Mumtaz, the operator of 400 dining venues for KFC, Long John Silver, Pizza Hut and Taco Bell in nine states. Things didn’t seem smart at first. He closed all his canteens after the pandemic intensified in the spring, and his sales, about $500 million a year, fell on average by 25%.
But he said he had transferred many of his 10,000 workers to cleaning and staffing facilities, which he said were the center of his business.
“All at the same pace,” said Mumtaz, owner of Richardson, Texas, the restauratelic Ampex Brands LLC.
Mumtaz said his monetary balance was advanced around April after parent company Yum Brands Inc. deferred royalty bills from the 5% it owed for several months. encourage sales while the number of consumers remained low.
Some landlords have granted rental discounts and their 3 banks have agreed to allow you to pay interest only on loans, postponing repayments from the principal. Mumtaz also earned a loan for the payment check coverage program valued at more than $5 million in April to help maintain 500 jobs, according to federal figures. He said he used the cash for layoffs.
At the same time, Mumtaz said, began attracting new customers, adding those who frequented independent restaurants and bars that were still closed. Mumtaz said its sales at Pizza Hut’s comparable retail outlets increased by 18% compared to last year in the summer, and that KFC, Taco Bell and Long John Silver’s businesses also recovered. Since then, he has repaid some of his deferred royalties.
Mumtaz said he felt optimistic: “I take every step carefully. “
The unease between independent places of eating affects a wide variety of suppliers, adding many seafood corporations and smallholder farmers who serve mainly consumers rather than supermarket consumers. Institute of Left Economic Policy.
Kate McClendon, co-owner of McClendon’s Select Organic Farms in Arizona, said 95% of her orders for places to eat disappeared when the state closed the dining venue service in March. The family farm circle has introduced a canned products program to stay afloat, but many of the special green vegetables they grow for chefs have not resulted in a call from the house’s cooks. He said the farm had recovered fewer than 60 of its 90 normal consumers from the place to eat and that orders were placed as often.
“Independent farms depend on independent restaurants. Big chains don’t shop on local farms,” McClendon said.
Many independent places to eat suffer in part because they tend to have a smaller physical footprint, especially in large, high-cost cities. Camilla Marcus closed the West-bourne cafe in Manhattan’s SoHo community in September after the owner refused to offer a West-bourne had no terrace and Ms. Marcus said returning the place to eat indoors at 25% of her ability would not allow painting on the common tables in her 1000-square-foot dining room.
“With a location, simply no levers to pull,” said Marcus, co-founder of the Independent Restaurant Coalition, which is pressuring Congress to approve a Democrat-backed stimulus package that would allocate $120 billion to the industry.
Nick Kokonas, co-owner of Chicago-based 4-storey chicago-based 4-restaurants, relied on a rotating takeaway menu to keep their operations afloat. Two of his restaurants took effect last month, one reached the break-even point and another lost $100,000, he said. . He plans to close some of them during the winter to keep effective.
“We will be open until December. So we don’t know,” Mr. Kokonas.
Robert St. John, owner of places to eat and bars in Hattiesburg, Mississippi, closed his places to eat in March when the state ended the service of places to eat and filed a mass unemployment claim for its three hundred employees.
Banks have restructured some of their loans, San Juan said, and won a PPP loan of about $600,000, but with sales below 70% in all six places to eat, he said, he couldn’t justify the return. An attempt at remote social restoration in his Italian restaurant ended due to inadequate demand.
“There was no enthusiasm or fever in our reopening, ” said Mr. St.
In the summer, after 32 years, Mr. John closed his iconic Purple Parrot Café, a destination to eat in the region that was worth $4,000 in bottles of wine. He said he knew couples who held the prom in combination at Purple Parrot and have now been combined for decades.
Since then, it has also closed an exclusive cocktail bar and doughnut shop, as business at the University of Southern Mississippi in Hattiesburg has sold out with the shift from school to virtual learning. St. John, who describes himself as an optimist in the face of failures, is asking for a $500,000 loan for small businesses to build a new place to eat with a giant yard where he can serve others outside.
“It’s scary, I’ll tell you, ” he said. I would refuse to think I’ll close more. “
Write to Heather Haddon at [email protected]
McDonald’s, Chipotle and Domino celebrate coronavirus dinner while their community’s food place fasts Wire Services/WSJ.