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Coronavirus news and updates about the Charlotte region, the Carolinas and beyond.

BizWorthy: Closing Of Bars And Restaurants Affects More Than Just The Service Industry

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Restaurants and bars in the Carolinas can't offer dine-in service durng the coronavirus pandemic.

Bars and restaurants across the Carolinas face a lot of uncertainty after the governors in both states ordered them to close in-house dining and offer only takeout and delivery. 

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The owner of two restaurants in downtown Davidson, Bill Schutz is dealing with the effects.

“You know, restaurants are a difficult business to manage anyway, you know, regarding cash flow, and it's going to be very difficult,” he said. “If a restaurant closes for a month, it'll probably never open again.”

Tony Mecia of the Charlotte Ledger Business Newsletter joins Morning Edition host Marshall Terry with more on the state of the restaurant industry and other business news.

Marshall Terry: Tony, this time a week ago when we spoke, many economists were still reluctant to use the word recession, but so much has changed since then. What do the economists you've been speaking to say now about what lies ahead?

Tony Mecia: Yeah. Marshall, you know, when we talked last week, they thought, "Well, looks like Charlotte can probably dodge the worst of this. We have some problems in the travel industry. You know, that's bad. And it'll probably be confined to that." You know, and then in a series of days, everything changes. I mean, over the weekend, you had a lot of very packed bars and restaurants in Charlotte, and now they're all closed down by the governor's order.

You know, the real problem, I think, Marshall, is not that just the bars and restaurants piece of it, although that is a big piece. And you do have some of these layoffs that have started from bars and restaurants. But you might say, "Well, gosh, I don't know anybody that works in a bar or restaurant and I'm not in that industry. How my affected?" The problem is really it's going to sort of ripple out from there, I think, in that there are a lot of companies that do business with bars and restaurants.

There are banks that lend money to restaurants. There are property owners who are depending on rent from restaurants, you know, there are office supply companies that sell to restaurants. And so it's not just a matter of just being confined to the bar and restaurant industry. The real issue is how much does this spread out? And and the real problem is that nobody really knows how long it is going to drag on for or what happens. And so you see a lot of headlines out there, "Are we going to head to a global depression?" And there are very big headlines and they're very scary headlines. The answer really is that nobody knows, and that's extremely unsettling for a lot of people.

Terry: Well, among the economists that you've spoken to around here, what do they think?

Mecia: So we sorted of step back and looked at the fundamentals of Charlotte, and Charlotte still — longer term, they're saying — is relatively in good shape. But you have you know, it's a growing city. There are a lot of people, at least until recently, that were moving here. Charlotte's probably better off than a lot of other places. But it's still caught up in what's going on nationally and internationally.

We're ... in a connected world now. And so we don't just get to sort of say, "We're going to sit this one out and everything's gonna be fine in Charlotte." We're gonna feel it, too. Big picture: We have a pretty diversified economy. We're not reliant on any one industry. Banking, yes, is big, but it doesn't account for as much of a share of the economy as it once did. You know, we have an emerging tech sector.

You know, we have a lot of the transportation sector that's going to be very crucial. There are a whole bunch of things I think that Charlotte has going for it. That's a positive. Obviously, a lot of negatives, too.

Terry: The airline industry, which is also taking a huge hit right now, is asking Washington for a bailout. Can we see the same sort of thing happen for bars and restaurants, at least a request? Has something like that ever happened?

Mecia: Yeah, I don't think it would be specifically targeting hospitality industry as much as it would be, you know, you're starting to see the government, the central government, take a look at what it can do to help small businesses. You know, can they make loans available? Can they give some sort of relief on taxes? There's talk of a payroll cut. So, you know, the Fed is doing things to try to give some liquidity to the banks so the banks can keep lending so the banks and keep working with some of these small businesses that have been so horribly affected.

So those are all positive steps or policy steps. I don't think would be a bailout in terms of just cash infusions. But there are some things that the government can do to kind of help small businesses. But, you know, some of these things take a little bit of time. And as you mentioned, Marshall, I mean, a lot of these bars and restaurants, they go without revenue for a week or two and they're in pretty bad shape.

Terry: How are other businesses like retail adapting to this new reality?

Mecia: So with the Charlotte Ledger, we've been speaking to owners of all different kinds of businesses this week, and what they tell us is they're just trying to adapt. They're having to pretty much overnight come up with a new model, come up with new ideas to try to get some of that revenue coming in to reflect the reality that people are generally not going out as much anymore, if at all, staying in their homes.

So they're doing things like they're taking their bartenders or their clerks and they're turning them into delivery drivers. Talked to somebody who runs a pet food store, for example, said nobody's coming in to buy pet food, but they're ramping up their deliveries of pet food to people's houses. And so you're seeing a lot of that. You're seeing bars and restaurants do that. You know, the brewery industry in town, I talked to one business owner who said they're making more cans because they want to sell those to bottle shops, they want to sell those in retail establishments, they want to deliver them to people's houses.

So these businesses are really having to turn on a dime, and that can be very challenging when they have no revenue coming in and they have a bunch of employees that they really want to pay, but they really are having a hard time with the means to pay them.

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