Though Restaurants Are Re-Opening, The Economic Toll On The Industry May Be Felt For Years

May 26, 2020
Originally published on May 27, 2020 10:38 am

Over the weekend, restaurants in most of North Carolina were allowed to serve sit-down customers again, though with social distancing and restrictions on capacity.

But the pandemic is expected to continue taking a harsh toll on an industry that has become one of the state's largest. It's likely to do lasting economic damage, especially in the neighborhoods, towns, and cities that have built reputations as eating destinations in recent years as the restaurant industry boomed.

Vivian Howard, the star of the PBS show "A Chef's Life," and her husband, Ben Knight, just announced their informal, seafood-centric restaurant in downtown Kinston, the Boiler Room, will close for good.

It and their flagship restaurant, Chef & the Farmer, had not only helped make her a celebrity chef, but brought new life to a faded city.

"They were very instrumental in helping to turn attitudes around about downtown, for sure," said Leon Steele, Executive Director of the downtown revitalization group Pride of Kinston. He said commercial real estate downtown is still changing hands in the midst of the pandemic, which he said is proof that the vitality the Howards helped bring to several blocks of downtown Kinston will continue.

Even if he's right, the Boiler Room's closing - and news Chef & the Farmer would stay shut at least though summer - was a reminder of the importance of the state's nearly 20,000 restaurants in helping communities thrive. They have created hundreds of thousands of jobs, lifted property values, lured other businesses and residential development, and boosted government coffers.

Nicholas Makris, an associate professor with Johnson & Wales University's Providence, R.I. campus who teaches food service management, estimates 44 percent of the nation's restaurants will be closed by the time the pandemic ends.

Others, he said, will be on such shaky financial ground they'll eventually close, too.

"The restaurant industry is in a dire, dire position, he said. "And the ripple effect that it's going to have on the local and state economy is going to be huge. The unemployment alone is going to be staggering. The loss of income and revenue for the state as far as sales tax and property taxes and things of that nature, it's going to be devastating."

Until recently, Makris also ran a restaurant in Providence, a city that's become one of the nation's best-known food destinations. If the number of closings is high, the impact there - and places like Durham and Asheville - could be complex.

"The neighborhoods will have to change their nature," he said. "The restaurants are the center of a lot of neighborhoods, and a lot of restaurants are gathering places that are places that people go to socialize."

"So not only will it have a financial impact, I think it's going to have a psychological impact as well on local and state communities," he said.

Close observers of the restaurant scene in North Carolina are hoping that the industry losses and resulting damage to other parts of the economy aren't as great as feared, but are bracing themselves.

"I think that it's frightening because most of us who live in Durham, Asheville, places like that, are here because of the independent nature and because of the thinking outside of the box mentality that we gravitate to, and if that no longer exists - especially in the restaurant world, that trickles down," said Cynthia Hill, an independent filmmaker whose work often focusses on food.

Hill worked with Vivian Howard on "A Chef's Life" and the new "Somewhere South," and her production company also made a documentary called "Food Town" that celebrates the nationally-known food scene in Durham.

That scene is part of a city renaissance that includes bars, condos, galleries, performing arts, and quirky boutique hotels. Hill says that it's hard to think about the damage to that economic ecosystem if the city loses large numbers of restaurants.

"Why are you coming to Durham?" She asked. "You go to a place because you get a unique experience, and Durham, one of those unique experiences is the food scene."

"So if that food scene doesn't exist anymore, you know, what's the draw?"

The pandemic has made restaurants one of the most threatened parts of the national and state economies. North Carolina restaurants have laid off or furloughed more than 300,000 people, according to the N.C. Restaurant and Lodging Association.

Makris said government officials need to do more to help more restaurants survive the pandemic. He said small, independent restaurants are among those most at risk. 

"Larger chains, high end restaurants, they have some type of cash reserves," he said. "When you're talking about independent, single unit restaurants, they do not have that luxury. They depend on a busy weekend in order to pay the bills from the previous month."

He expects the majority of the 44 percent of restaurants that close will be single, independently-owned ones. And not just because their finances typically are tight, but also because the product they're selling isn't just food, it's an experience.

No one knows that more than people like Dick and Sue Barrows, who own Kitchen, a neighborhood restaurant in Chapel Hill that's thrived for a decade on traditional French bistro cooking and informal intimacy.

It hasn't been able to offer that ambience in recent weeks with its small dining room shut.

Still, Dick Barrows said he's in no rush to open under the new restrictions.

He wants to carefully ponder all the new variables. Things like the right disinfecting regimen, what hours and menu items might make sense, whether to use a reservation system, and how seating would work.

"I'm also just trying to figure out what would be a positive experience for the customer," he said. "Like, what would make them go, 'Well, this was good.'"

When the Barrows decided to try one-day-a-week-takeout, he wasn't sure that could keep them afloat.

But what they got was a new measure of the restaurant's value to the community: It has been managing to scrape by on just Saturday curbside service.

"When we did the curbside., I just said, I don't know, we'll try it," Barrows said. "Our customers have been very supportive. We found out that we have loyal customers that like the restaurant and like us and have felt like they wanted to support us."

They begin planning each week's meal and taking orders days in advance, then choreograph the pickups. And they're only able to keep part of their staff at work.

He said most of his customers don't seem to be in a rush to dine in. In the restaurant's weekly email to a list of about 950, he asked for their thoughts on that.

"I got like 30 responses and of those, I would say that 25 said something like, 'You know, we wish you well, but we're not going to come eat in the restaurant for anytime in the near future, but I hope you continue to do your curbside, and we will continue to support that," he said.

And for now that loyalty is buying Kitchen - and its customers - more time to navigate an uncertain future.

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