Story at a glance
- The bar and restaurant industry is suffering across the country, especially in food-focused cities like New York.
- New York’s restaurant industry produces about $50 billion per year — money that the city will now be losing as restaurants are forced to close as a result of the quickly spreading coronavirus.
- Many part-time and hourly service workers are now out of jobs, and the unemployment office is being flooded with requests.
- Nonprofit organizations such as Rethink Food NYC are attempting to aid those most affected by the shutdowns.
Bar and restaurant owners across the country are suffering as coronavirus-related restrictions continue to increase. In big cities like Los Angeles, Chicago and New York City matters are made even worse by competition and sky-high rent prices.
New York in particular, the city that never sleeps, is known for its bustling restaurant scene and high constant energy. Add that together with a population density of 26,403 people per square mile and you have a recipe for disaster when it comes to attempted “social distancing.”
A city in quarantine
By 8 p.m. on Monday, casinos, gyms and movie theaters in New York and its neighboring states, New Jersey and Connecticut, were closed. Bars and restaurants have been limited to takeout and delivery, and Governor Cuomo said he was encouraging businesses to close at 8 p.m.
Cafes, bars and restaurants in the city were now wrestling with some serious decisions to make: Stay open and risk the health of their workers, or close and suffer the consequences. Big name joints like David Chang’s Momofuku and Daniel Boulud’s restaurant Daniel decided to shutter ahead of the mandate.
After several days of keeping its entire workforce on payroll after shutting down its restaurants, one of the city’s most prominent restaurant companies, Union Square Hospitality Group, was faced with the task of firing about 2,000 employees, as reported by Eater. The layoffs, which represent 80 percent of the company’s total workforce at more than 20 restaurants, took effect immediately earlier this week.
The flood of laid-off workers from many of these dining and drinking establishments seeking unemployment benefits swamped New York’s Labor Department on Monday, after Governor Cuomo waived the usual seven-day waiting period to apply. Workers who had been let go over the weekend also immediately tried to replace some of their lost income.
Within hours, applicants were complaining about not being able to apply online — many saying that the state’s system was crashing throughout the day. A department spokeswoman, Deanna Cohen, said the agency had received 8,758 calls by noon, more than triple what it got last Monday.
A once-thriving industry, now in sudden collapse
The sudden disruption has caused a ripple effect of damage throughout the restaurant world and its related industries, such as shipping, farming and food production. Many independently owned restaurants rely on their doors being open to customers every day — and seldom have a large excess of cash stored away for a rainy day. They simply are not able to operate that way.
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It’s bad news for the city as well, considering the New York City restaurant industry produces about $50 billion in sales annually. Darren Tristano, CEO of research and consulting firm FoodserviceResults, said he initially projected a 3.3 percent growth rate for the nation’s restaurant industry, but the coronavirus upended those projections. Now, he said, the nation’s restaurants are looking at finishing out the year in the red.
“Even if the closures are only impacted over the next 30 to 60 days, it’s very likely to cause the industry to decline on a nominal basis,” Tristano told NBCNews. “These are not sales you're going to make up, and it’s very likely we’re going to see even stronger declines. Even after restaurants open back up, consumers are going to stay away because of fear.”
After swelling outcry from the hospitality industry, the state said Thursday that it would make a decision on changes for the collection of sales taxes from businesses later today in light of the ongoing novel coronavirus crisis.
In a press conference on Thursday morning, Robert Mujica, the state’s budget director, said the tax department is “looking at the deadline,” but noted that restaurants and bars are holding sales tax on revenues that they accrued before the crisis started.
The deadline to pay sales tax is March 20, and typically represents 5 to 10 percent of revenue and is collected once every quarter for businesses. The state’s announcement comes amid growing calls by several restaurant and bar owners and street food vendors to forgive tax collection until restaurants can return to normal business.
On Tuesday, Mayor Bill de Blasio said that businesses would need to pay taxes on time because New York City “does not have unlimited resources” and said owners will need to “provide proof of hardship” for allowances.
Advocacy group Move On has launched a petition calling on Governor Andrew Cuomo to not just forgive tax collection until business normalizes but to also return the sales tax amounts that businesses have already submitted so far.
More than 20 of New York City’s top restaurant groups have also banded together to form a new hospitality organization called Relief Opportunities for All Restaurants. The new organization launched publicly on Thursday with a goal to synthesize grassroots efforts from relief funds and local legislature petitions and to lay out exactly what restaurants need from the local government in order to survive the pandemic.
Nonprofit organizations throughout the city have been launching initiatives in an attempt to provide relief to the hurting industry. One organization, Rethink Food NYC, started a Restaurant Response Program to provide a $40,000 grant for 30 NYC-based restaurants at risk of closing operations due to the coronavirus outbreak.
The expectation for their program is that restaurants accepted to participate will turn their restaurants into community kitchens, using the funds to prepare meals at an affordable price point while continuing to employ team members and temporarily operating on a distributor model to help mitigate the effects of any food shortages.
Little Tong Noodle Shop, owned by Chef Simone Tong, is now the first restaurant to participate in the program, which launched on Thursday.
“We are honored and privileged to have this opportunity to partner with Rethink Food to provide affordable meals to New Yorkers,” says Tong. “Rethink’s mission to minimize food waste from restaurants and stores to feed the needy has always been commendable, and their drive now to expand this work in a time of unparalleled crisis is nothing short of heroic. Working with Rethink has allowed us to revisit our roots with intention.”
Tong says that she’s always thought of her restaurant as a place of comfort and sustenance, and that through the partnership they’re still able act on one of those two defining tenets — to supply affordable, nutritious and delicious meals to their community.
“In the three years that Little Tong has been in the East Village, our diners and neighbors have become our family. It is with that notion that our team unrelentingly pushed forward — risking their own health and wellbeing — to see this initiative with Rethink to fruition. We are here for our family,” says Emmeline Zhao, the GM of Little Tong, adding that while New Yorkers are tenacious, they’re not invincible. “Our team is dedicated to providing meals to the best of our ability both to offer some semblance of normalcy through volatility of epic proportions, and to serve as that beacon of hope that we will weather this storm together and make it out on the other end even stronger.”
For those who aren’t able to leave their homes, a digital platform called Goldbelly is also shipping regional foods from across the U.S. directly to peoples’ doors with the hope of empowering small business. While many are attempting to help family-run businesses by purchasing gift cards and merchandise, Goldbelly also allows New Yorkers to support establishments like Mike's Pastry, Ess-A-Bagel and McLoon's Lobster Shop through its online marketplace.
The bartending community has been hit especially hard as well. While some restaurants are still able to provide those pick-up and delivery services, a bar can’t exactly provide ready-made cocktails quite as easily. That’s where nonprofits like the USBG National Charity Foundation come in. The foundation is dedicated to advancing the stability and well-being of service industry professionals through education and charity. The foundation has launched a Bartender Emergency Assistance Program available to any bartender or the spouse or child of a bartender, and applications are being taken now.
Donate to the Restaurant Workers’ Community Foundation COVID-19 Crisis Relief Fund
Buy restaurant gift cards from Rally for Restaurants
Purchase “bonds” or gift cards to redeem later at a discount from the Dining Bonds Initiative.
Help Jose Andres bring fresh meals to those in need with World Central Kitchen.
Contribute to the Emergency Coronavirus Workers Support Fund.
Sign the Change.org petition for ROAR (Relief Opportunities for All Restaurants).