May 26, 2020 • 7 mins
As the country continues to reopen for business, one of the hardest hit industries will still have a difficult time recovering. Restaurants will see a long slow ramp up back to the way things were. Real-time industry data is showing that while people are starting to get out there, restaurants are only seeing a fraction of the business they used to have, partly due to capacity limits for social distancing. The estimates are still dire as to whether some businesses can remain open after the comeback. Jordan Weissmann, senior economics reporter at Slate, joins us for more.
Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
It's Tuesday, May. I'm Oscar Amrrors from the Daily Dive
podcast in Los Angeles, and this is your daily coronavirus update.
As the country continues to reopen for business, one of
the hardest hit industries will still have a difficult time recovering.
Restaurants will see a long, slow ramp up back to
the way things were. Real time industry data is showing
(00:20):
that while people are starting to get out there, restaurants
are only seeing a fraction of the business they used
to have, partly due to capacity limits for social distancing.
The estimates are still dire as to whether some businesses
can remain open after the comeback. Jordan Weissman, senior economics
reporter at Slate, joins us for more. Thanks for joining us.
Jordan's Hey, thanks for having me on. I wanted to
(00:42):
talk about restaurants and how they're gonna be faring as
states are reopening. I think all fifty states now are
starting to reopen in some capacity. The restaurants scene is varying,
obviously state by state, but the restaurant industry really one
of the hardest hit industries in this whole coronavirus pandemic.
There's been a lot of restaurants who have managed to
(01:02):
stay open just doing delivery and take out, But there's
a ton of other restaurants who have clothes throughout this
and might never reopen. And as we're seeing some states reopening,
we're getting some headlines and some good shots of people
actually making out to restaurants, but it could be a
little misleading. We get a lot of real time data
from the industry, from places like open table and other
(01:22):
places to do analysis on restaurants and people eating out,
and the numbers aren't all really, they're just yet. So Jordan,
tell us a little bit about what's going on with restaurants.
You know. The first thing I want to say is
before you even get into the numbers, some people ask
me why do we care so much about restaurants specifically
right A lot of different small businesses are hurting right now.
(01:43):
Why is it such a big deal how the food
industry is doing. And one very simple and not technical
answer to that is people like to eat out. Like
a restaurants are a huge part of just like the
cultural fabric of cities and towns, and there are part
of what makes going out on a weekend fun. People
can are about these They with def emotional attachment to restaurants,
but also there are economic reasons to care about this industry.
(02:05):
It's a huge employer. There are more than six hundred
thou was in full service restaurants in the country that
haven't essentially shut down in some capacity or another, partially
or entirely because of this crisis. There are millions of
jobs attached to them. And the more of these businesses
that go busts, that don't make it through this crisis
or its immediate aftermath, the longer it's going to take
for the whole economy to heal. The more small businesses
(02:28):
that disappear and can't bring their workers back, the longer
it's going to take us to kind of crawl out
of this hole we've ended up in. So it's important
how quickly restaurants can recover, and at the same time,
you have to balance their concern for their business with
public health issues. Right. So, what we're seeing is that, yeah,
there are all these stories about how in Georgia, restaurants
in some places are getting packed again, and how you know,
(02:49):
in Texas you're seeing people show up at dinners and stuff.
But if you actually look at the numbers, they're not
quite as encouraging. You mentioned open table, which is actually
a surprisingly youthful data source right now, because they track
obviously reservations made on their platform, but they also track
walk in diners and people who make phone reservations, because
people who run restaurants use the software for a bunch
of different tasks, and they'll tell you that right now,
(03:11):
the number of diners at restaurants in places like Georgia
are still down about eighty percent in Florida, same thing
in Oklahoma, which is doing as well as anyone it's
closer to. And you can look at other data sources too.
There's credit card activity data that suggests that of restaurants
are entirely closed in places like Texas and Alabama and Arizona,
(03:35):
which has been a lot of handfair about how these
states are reopening again. That's a fifth to a quarter
of restaurants they are not doing any business at all,
not even doing takeout. Again. There's this one company called Toast,
which is essentially a point of sales software provider. You know,
when you go and swipe your credit card at a restaurant,
they are the ones who are recording your sale or
recording what was charged on your check. According to their data,
(03:57):
total spending year over year at the well early bird
states as I refer to them in my teeth, are
still down again. Total spending of restaurants is down year
over year. In states that have reopened early it's gradually recovering,
but those are not the kind of numbers that are
going to sustain a business if that continues. A lot
(04:17):
of them are not going to survive with the reopening,
and a big part of that, obviously is the social
distancing measures that are put in place. You know, restaurant
is not going to be able to fill to capacity
anytime soon. Just looking at kind of where all the
states stand right now, there's a handful of states that
are letting restaurants open at fifty percent capacity, but the
vast majority of them are either twenty five or thirty
(04:38):
three percent capacities, which you can have in there. So
a lot of times these restaurants, depending on how many
covers they have throughout the night or throughout the day,
they're barely meeting the expectations that they need to keep
the restaurant open and to make any type of profit there.
So these capacity limits are going to be hurting them
for some time to come. Leading it's going to be
a long, slow recovery for them because they're not gonna
(04:59):
be able to hit that's been very quickly. A restaurant
can handle having half the three quarters of its tables
empty on a Monday night, it cannot handle it if
that's every Friday, Saturday, and Sunday. They will not survive
that way. It's that clear and simple. And so the
question is how long will these social distancing measures have
to stay in places the stake of public health. My
(05:20):
guess is probably for a while. Even in places where
the number of infections is fairly low, people are nervous.
They want these protections in place, and so do the
local officials. And then second is what else can they
do to make money. One option that's promising is to
expand the amount of outdoor seating for the summer, and
that seems to be what I'm told has happened in
South Carolina, which is probably having one of the quickest
(05:42):
recoveries right now. Restaurants in Charleston are being given a
lot of sidewalk space and that's allowed them to start
making up business a little bit quicker. But to me,
it seems pretty obvious that they're going to have to
be some longer term support programs in the government in
order to make all these businesses survive or at least
tried to water until things get a little bit more
(06:02):
favorable for them. So far, what the data is showing
is that is kind of a good news bad news scenario.
It's good news that the states are reopening their restaurants.
People are getting out there, although not to the capacity
that we wanted to just yet. But on the flip side,
the bad news is that how long can these restaurants
be sustainable that way? And in a lot of cases
(06:23):
it doesn't seem that they will be able to survive.
So it's this tough balance that needs to happen. I
would even go a little further and say part of
the good news here is also that it doesn't seem
like people are being too irresponsible. Right. We've seen all
those pictures of and I guess you know, videos of
like crowds running back to brunch or whatever, But it
doesn't seem like that's the norm. Places are not packed
to capacity. Businesses and diners are gradually returning to the
(06:46):
dinner table, and so that's not a bad thing if
you're worried about public health. Just the question is, since
everyone is worried about public health, nobody wants to take
crazy risks. How do we make sure that these vital
businesses that we all love and cherish don't just get
wiped out. Yeah, definitely something big point of concern for everyone.
Jordan Weissman, senior economics writer at Slate, Thank you very
(07:09):
much for joining us. Great by Oscar Ramirez, and this
has been your daily coronavirus update. Don't forget that. For
today's big news stories, you can check me out on
the Daily Dive podcast every Monday to Friday, So follow
us on I Heart Radio or wherever you get your
podcast
It's Tuesday, May. I'm Oscar Amrrors from the Daily Dive
podcast in Los Angeles, and this is your daily coronavirus update.
As the country continues to reopen for business, one of
the hardest hit industries will still have a difficult time recovering.
Restaurants will see a long, slow ramp up back to
the way things were. Real time industry data is showing
(00:20):
that while people are starting to get out there, restaurants
are only seeing a fraction of the business they used
to have, partly due to capacity limits for social distancing.
The estimates are still dire as to whether some businesses
can remain open after the comeback. Jordan Weissman, senior economics
reporter at Slate, joins us for more. Thanks for joining us.
Jordan's Hey, thanks for having me on. I wanted to
(00:42):
talk about restaurants and how they're gonna be faring as
states are reopening. I think all fifty states now are
starting to reopen in some capacity. The restaurants scene is varying,
obviously state by state, but the restaurant industry really one
of the hardest hit industries in this whole coronavirus pandemic.
There's been a lot of restaurants who have managed to
(01:02):
stay open just doing delivery and take out, But there's
a ton of other restaurants who have clothes throughout this
and might never reopen. And as we're seeing some states reopening,
we're getting some headlines and some good shots of people
actually making out to restaurants, but it could be a
little misleading. We get a lot of real time data
from the industry, from places like open table and other
(01:22):
places to do analysis on restaurants and people eating out,
and the numbers aren't all really, they're just yet. So Jordan,
tell us a little bit about what's going on with restaurants.
You know. The first thing I want to say is
before you even get into the numbers, some people ask
me why do we care so much about restaurants specifically
right A lot of different small businesses are hurting right now.
(01:43):
Why is it such a big deal how the food
industry is doing. And one very simple and not technical
answer to that is people like to eat out. Like
a restaurants are a huge part of just like the
cultural fabric of cities and towns, and there are part
of what makes going out on a weekend fun. People
can are about these They with def emotional attachment to restaurants,
but also there are economic reasons to care about this industry.
(02:05):
It's a huge employer. There are more than six hundred
thou was in full service restaurants in the country that
haven't essentially shut down in some capacity or another, partially
or entirely because of this crisis. There are millions of
jobs attached to them. And the more of these businesses
that go busts, that don't make it through this crisis
or its immediate aftermath, the longer it's going to take
for the whole economy to heal. The more small businesses
(02:28):
that disappear and can't bring their workers back, the longer
it's going to take us to kind of crawl out
of this hole we've ended up in. So it's important
how quickly restaurants can recover, and at the same time,
you have to balance their concern for their business with
public health issues. Right. So, what we're seeing is that, yeah,
there are all these stories about how in Georgia, restaurants
in some places are getting packed again, and how you know,
(02:49):
in Texas you're seeing people show up at dinners and stuff.
But if you actually look at the numbers, they're not
quite as encouraging. You mentioned open table, which is actually
a surprisingly youthful data source right now, because they track
obviously reservations made on their platform, but they also track
walk in diners and people who make phone reservations, because
people who run restaurants use the software for a bunch
of different tasks, and they'll tell you that right now,
(03:11):
the number of diners at restaurants in places like Georgia
are still down about eighty percent in Florida, same thing
in Oklahoma, which is doing as well as anyone it's
closer to. And you can look at other data sources too.
There's credit card activity data that suggests that of restaurants
are entirely closed in places like Texas and Alabama and Arizona,
(03:35):
which has been a lot of handfair about how these
states are reopening again. That's a fifth to a quarter
of restaurants they are not doing any business at all,
not even doing takeout. Again. There's this one company called Toast,
which is essentially a point of sales software provider. You know,
when you go and swipe your credit card at a restaurant,
they are the ones who are recording your sale or
recording what was charged on your check. According to their data,
(03:57):
total spending year over year at the well early bird
states as I refer to them in my teeth, are
still down again. Total spending of restaurants is down year
over year. In states that have reopened early it's gradually recovering,
but those are not the kind of numbers that are
going to sustain a business if that continues. A lot
(04:17):
of them are not going to survive with the reopening,
and a big part of that, obviously is the social
distancing measures that are put in place. You know, restaurant
is not going to be able to fill to capacity
anytime soon. Just looking at kind of where all the
states stand right now, there's a handful of states that
are letting restaurants open at fifty percent capacity, but the
vast majority of them are either twenty five or thirty
(04:38):
three percent capacities, which you can have in there. So
a lot of times these restaurants, depending on how many
covers they have throughout the night or throughout the day,
they're barely meeting the expectations that they need to keep
the restaurant open and to make any type of profit there.
So these capacity limits are going to be hurting them
for some time to come. Leading it's going to be
a long, slow recovery for them because they're not gonna
(04:59):
be able to hit that's been very quickly. A restaurant
can handle having half the three quarters of its tables
empty on a Monday night, it cannot handle it if
that's every Friday, Saturday, and Sunday. They will not survive
that way. It's that clear and simple. And so the
question is how long will these social distancing measures have
to stay in places the stake of public health. My
(05:20):
guess is probably for a while. Even in places where
the number of infections is fairly low, people are nervous.
They want these protections in place, and so do the
local officials. And then second is what else can they
do to make money. One option that's promising is to
expand the amount of outdoor seating for the summer, and
that seems to be what I'm told has happened in
South Carolina, which is probably having one of the quickest
(05:42):
recoveries right now. Restaurants in Charleston are being given a
lot of sidewalk space and that's allowed them to start
making up business a little bit quicker. But to me,
it seems pretty obvious that they're going to have to
be some longer term support programs in the government in
order to make all these businesses survive or at least
tried to water until things get a little bit more
(06:02):
favorable for them. So far, what the data is showing
is that is kind of a good news bad news scenario.
It's good news that the states are reopening their restaurants.
People are getting out there, although not to the capacity
that we wanted to just yet. But on the flip side,
the bad news is that how long can these restaurants
be sustainable that way? And in a lot of cases
(06:23):
it doesn't seem that they will be able to survive.
So it's this tough balance that needs to happen. I
would even go a little further and say part of
the good news here is also that it doesn't seem
like people are being too irresponsible. Right. We've seen all
those pictures of and I guess you know, videos of
like crowds running back to brunch or whatever, But it
doesn't seem like that's the norm. Places are not packed
to capacity. Businesses and diners are gradually returning to the
(06:46):
dinner table, and so that's not a bad thing if
you're worried about public health. Just the question is, since
everyone is worried about public health, nobody wants to take
crazy risks. How do we make sure that these vital
businesses that we all love and cherish don't just get
wiped out. Yeah, definitely something big point of concern for everyone.
Jordan Weissman, senior economics writer at Slate, Thank you very
(07:09):
much for joining us. Great by Oscar Ramirez, and this
has been your daily coronavirus update. Don't forget that. For
today's big news stories, you can check me out on
the Daily Dive podcast every Monday to Friday, So follow
us on I Heart Radio or wherever you get your
podcast
Popular Podcasts
Fudd Around And Find Out
UConn basketball star Azzi Fudd brings her championship swag to iHeart Women’s Sports with Fudd Around and Find Out, a weekly podcast that takes fans along for the ride as Azzi spends her final year of college trying to reclaim the National Championship and prepare to be a first round WNBA draft pick. Ever wonder what it’s like to be a world-class athlete in the public spotlight while still managing schoolwork, friendships and family time? It’s time to Fudd Around and Find Out!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.