PRLA Restaurant & Lodging Matters Summer 2020

10 •  PENNSYLVANIA RESTAURANT & LODGING matters  •  Summer 2020 BJ’s Restaurants even saw an upswing in its off-premise business after the casual chain’s dining rooms started to reopen in May. Like many of his peers, CEO Greg Trojan believes the full-service market is morphing into two distinct sales channels, “with certain guests excited to return to the social experience of dining out and others still using takeout and delivery orders to feed themselves and their families in the comfort of their own homes.” Black Box Intelligence says the growth in off-premise has decelerated, but it did not report any drop in the overall volume. 3 Can my restaurant make money at 25% or 50% of its dine-in capacity? That depends on how large your restaurant is—can we get a “Doh!” on that answer, please? The Cheesecake Factory and BJ’s have said that their large dining spaces have proven a major advantage while many states are capping dine-in capacities. But others have found that the percentages set by officials are less of a factor in determining seat counts and sales volumes than the need to keep parties six or 10 feet apart. “Once you’re past 25% occupancy, that six-foot restriction trumps any other restriction there is, because you can’t get to 50%,” Darden CEO Gene Lee told investors. His company’s main brand, Olive Garden, is trying to maintain social distancing while maximizing on-premise capacities by installing barriers, as is Texas Roadhouse. It’s a common tactic—so common that some operators have complained of the difficulties in finding enough plexiglass to partition off their booths. Overall, many chains have reported they’ve hit or surpassed the unit-level breakeven point even with limited on-site service, though they attribute the return to a positive cash flow more to surging off- premise business than the resumption of table service. In contrast, many small independents have opted to stay closed or rely solely on off-premise because the staffing needed to service 10 or 20 tables would likely cost more than what they’d net in sales. 4 Is the pandemic itself getting any better? Snap on CNN and you’ll be horrified. Not only are the rates of infections accelerating in about three dozen states, to a national rate double what it was in April, but health authorities have identified a new danger that should be of particular worry to restaurants. Several hundred experts have pressed the World Health Organization, as white-shoed and august a body as there is in health care, to acknowledge evidence that microscopic droplets Dining rooms might not be safe unless sophisticated air purification systems are installed. But even then, consumers’ trust in the safety of dining out could be badly shaken.