Delta Variant Shifts Restaurant Landscape
As Covid-19 vaccines become more widely available and lockdown restrictions are eased, many Americans are opting to get vaccinated. This transition has sparked a surge in restaurant reservations and sales. However, the Delta variant of the Coronavirus is causing concern within the restaurant industry due to a resurgence in cases.
In fact, despite the overall improvement, growth within the sector seems to be slowing. According to the U.S. Census Bureau, restaurant and bar sales grew by 1.7% from June to July, a slower rate of growth than the 2.4% increase between May and June.
Some restaurants are starting to notice disruptions, including decreased sales, no-shows, nervous customers, and supply chain problems. Many are wondering when they will return to normalcy and how severe the impact will be.
Masks and Changing Dynamics
For Nya Marshall, the owner of Detroit's Ivy Kitchen, business was slowly improving after a challenging year. She felt that things were looking up, but a shift occurred about six weeks ago. Ivy Kitchen's sales have since dropped by approximately 24%, according to Marshall.
"The Delta variant is causing concern for people," she said, referring to customers who started wearing masks again in the restaurant, even though Michigan's current guidelines do not mandate this for vaccinated individuals. Some customers are also requesting social distancing.
Marshall is worried about the potential for another shutdown. "I worry about a governmental stalemate every day," she said, expressing her belief that they might not be able to withstand another closure, especially after barely surviving the last one.
Outdoor Reservations and the Impact of the Delta Variant
Laurie Thomas, the CEO of the Golden Gate Restaurant Association in San Francisco and the owner of Rose's Cafe and Terzo, has noticed an increase in no-shows or cancellations. When San Francisco reintroduced its mask mandate due to rising infection rates, "only about 15–20% of our customers showed up, which was extremely disappointing," said Thomas. Typically, they see around 5–10% no-shows or cancellations.
Thomas reported that there has been a significant shift towards outdoor seating since California lifted its mask mandate for vaccinated individuals in June. "In an ideal world, we would want our customers to eat everywhere," she said, emphasizing the importance of high capacity for the survival of the restaurant.
Friday marked the city's implementation of new guidelines requiring validation of full vaccination for those eating indoors.
Thomas supports the vaccine mandate, stating that it is safer for their employees. However, she is concerned about the potential backlash from customers who are not vaccinated and feel surprised by this change. "We don't want that," she said.
Reopening Delays and Complicated Supply Chains
Steve Sarver, owner of the Ladle & Leaf soup and salad chain in San Francisco, initially planned to open five more locations in September, aiming to cater to the office population. But the ongoing uncertainty surrounding workers' return to offices has resulted in only two stores being operational, with one permanently closed.
Sarver admitted that it was challenging to predict reopening plans, given the ongoing unpredictability regarding the return of the office population. "I'm having a hard time predicting our reopening plans," he said.
The supply chain challenges that the Delta variant is causing are having an impact on Dick's Drive-In, a small fast-food chain in Seattle. While the restaurant mainly offers takeout, disruptions in the supply chain due to the spike in cases are still being felt, as evidenced by last week's straw shortage, following a stall in salt supplies earlier.
Jasmine Donovan, president of Dick's, highlighted the unique challenges each disruption presents. One week, a large car dealership was closed after a staff member tested positive, forcing the team to send a truck to retrieve supplies. Another time, a delay in delivery was caused by employee shortages in the supply chain.
"We're giving ourselves every day like we're crazy busy trying to ensure that we have everything we need to serve our customers," Donovan said, expressing gratitude for customer patience and understanding.
Overall, the Delta variant is exacerbating existing challenges for the restaurant industry. Although many businesses are adapting with safety measures and incentives, the long-term impacts remain uncertain.
