Restaurants & COVID-19

Topics: Small Business

Summary: The challenges for restaurants grow as the COVID-19 pandemic continues, but restaurant owners are adjusting to their new normal as they reopen their businesses. Find out the good and bad news about the restaurant industry and how they are adapting their services.

How the Restaurant Industry is Working to Survive the Coronavirus Pandemic

Restaurants have been one of the hardest-hit industries during the coronavirus pandemic. While we are still in the first wave of the COVID-19 crisis, many restaurant owners wonder if their business will be able to survive a second or even a third wave of the coronavirus. Tracking restaurants on their platform across the nation during the pandemic, Yelp reported there were over 177,000 restaurants closed down in mid-April, right in the midst of state shutdowns. As of mid-July, the number is down to 132,500, but the amount of restaurants opening or closing fluctuates as spikes in coronavirus cases continue to rise across the country.

The report also found almost 16,000 restaurants in the U.S. permanently closed since the start of the coronavirus, and the number of closures continues to grow. Yelp also reported that restaurants had surpassed the retail industry for the highest number of business closures since the pandemic closures stared in March.

The majority of the restaurant closures are in highly populated cities such as Los Angeles, New York and in larger states like California and Texas. Some restaurant owners were able to get Paycheck Protection Program (PPP) loans as part of the CARES Act, a short-term fix for restaurant owners, run through August. Further relief grants and loans are pending in the U.S. Congress.

Adjusting Restaurant Services

As coronavirus cases spread across both urban and rural areas of the country, restaurants have had to adjust their indoor dining capabilities to adhere to social distancing rules. Many have added outdoor eating opportunities. Other restaurants have adapted to take out and delivery services only. Some restaurants shifted to a pop-up pantry format, offering the ingredients for meal and baking preparation, while some fine dining restaurants focused on preparing meals for local food pantries.

Restaurant owners have adjusted indoor seating by removing excess tables or bar stools, resetting tables to add plastic screens between tables, and some restaurants have upgraded ventilation systems with UV filtration. However, all of these steps are at an additional cost to the owners.

Some restaurants are taking their time reopening, making sure that every safety precaution is in place for service as well as the proper amount of food and service inventory. Doing so has helped them prepare for another shutdown if it should be decreed in their city or state. There is uncertainty about how the coronavirus will continue to impact restaurants as the weather turns colder. Still, owners are doing all they can now with offering options like outdoor dining and other services to help survive the possible shutdowns.

Some Good News for Restaurants During COVID-19

While there are many stories of the pandemic’s negative impact on the restaurant industry, there is some good news as restaurant owners adjust to new ways of serving their customers.

Cities have adjusted zoning laws to allow restaurants (who have applied) to expand outdoor dining onto sidewalks and parking lots. In New York City, a council member has introduced a report asking the city to implement an annual outdoor dining program and to extend emergency measures such as takeout cocktails and food delivery fee caps to help support the city’s restaurants. The plan also has measures to provide grants to help prevent evictions and suspend commercial rent tax for some businesses. Over 9,000 establishments in New York City have applied and been approved for outdoor dining during this summer, but the programs will be ending at least by October 31. New York City Mayor, Bill Deblasio, recently announced that the outdoor dining project would continue next year, starting in June (possibly earlier) 2021. Other cities and states are offering similar help to restaurants.

Keeping Restaurants Safe for Workers and Customers

Reopening restaurants will be based on local and state circumstances and guidelines for cleanliness, social distancing and employee health practices. The Centers for Disease Control (CDC) continues to provide updated reopening guidelines. Restaurant owners need to have programs in place to reopen their restaurants safely, including:
  • Hygiene best practices
  • Contactless delivery
  • Dedicated pickup area
  • Regular training
  • Driving safety training
  • Readily available hand sanitizer
  • Providing masks to patrons who did not wear them

The dining experience has dramatically changed. Restaurants that have reopened have to put even more of a focus on continuous cleaning and sanitizing in the dining and kitchen areas. They should follow the OSHA and CDC recommendations and increase the cleaning of frequently touched surfaces, such as door handles and touch-screen kiosks. Tables should be disinfected after each customer. Restaurant staff should wear masks and wash their hands for 20 seconds, washing them more often than usual. Staff should be temperature-checked before each shift and asked if they are experiencing any COVID-19 symptoms, and if they are, they should be sent home.

Focus on Motor Vehicle Delivery Safety for Deliveries

Standard safety tips should be followed to protect restaurant employees. As the roles and responsibilities of the staff shift to focus on different options, such as delivery services, it’s essential to make sure that everyone has training in the latest safety protocols.

AmTrust anticipates motor vehicle claims will continue to become more common in the restaurant industry as delivery is taking on a prominent role during the coronavirus pandemic. Before COVID-19 hit, the impact of motor vehicle accidents was already a growing concern, as motor vehicle accidents account for some of the more costly claims for restaurant classes.

As more restaurants add delivery services, owners should focus on making sure drivers are following safe driving requirements. Restaurant owners should review Motor Vehicle Records (MVRs) for all of their drivers, especially in cases where other staff members cover for drivers during peak times. Restaurants should develop a safe driving policy that requires their drivers to take safety training before they start making deliveries.

AmTrust Helps Our Restaurant Insureds

AmTrust offers tips to help small businesses reopen safely and efficiently. We also have a library of coronavirus resources to help our appointed agents and small business insured stay informed, safe, and healthy throughout these difficult times. AmTrust’s Loss Control team can identify specific hazards and offer solutions that fit your restaurant. For more information about our small business insurance solutions, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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