Upscale casual, fine dining segment suffers largest impacts, analytics company says
Black Box Intelligence has found almost 70% of the restaurant companies it surveys had seen traffic decline as a result of the coronavirus pandemic, the company said Tuesday.
Restaurants most negatively impacted were those in upscale casual and fine dining, with 85% of restaurant companies in those segments reporting traffic declines, the Dallas-based analytics company said.
The Black Box survey was for the week ended March 14, before many states and municipalities had started to impose strict guidelines that closed many dining rooms to maintain “social distancing” and limit the size of gatherings in order to stem the spread of the COVOID-19 virus.
The impact of restaurant dining room closures was expected to be broad, with a Texas industry association estimating that a half million jobs would be lost.
The Texas Restaurant Association (TRA), in a statement released Tuesday, said the closure of restaurant dining rooms in two of the state’s 254 counties — Dallas County and Harris County, home to Houston — on Monday “will account for a projected loss of up to 500,000 jobs in the Texas restaurant industry.”
The association said 1.4 million workers are employed in the state’s restaurant industry, with an estimated 250,000 employees in Dallas County and 300,000 employees in Harris County. The capital of Austin closed dine-in restaurant on Tuesday.
“The Texas Restaurant Association projects 25%-30% of independent restaurants will close if the reduction in patrons continues,” the group said in a statement. “With more than 50,000 restaurants in Texas, this will change the culinary scene and business environment in every community across the state, drive significant unemployment and create a massive financial deficit for cities and towns that rely on the tax revenue of these establishments.”
The TRA said restaurant owners also have great concern for their counterparts in the food supply chain industries, in which the TRA estimates that another 500,000 or more jobs could be lost, including in farms, trucking, manufacturing, suppliers and distributors.
Black Box Intelligence also surveyed restaurant company responses to the coronavirus epidemic.
“The most commonly implemented measure or procedure in response to the outbreak has been enhancing sanitization protocols (96% of companies have implemented this measure), followed by implementing protocols for employees who have been ill or exposed to the virus to return to work (78% of respondents) and training employees on dealing with potentially ill customers (55% of respondents),” the company said.
About a third of companies in all segments were reporting additional staffing challenges due to the coronavirus. “These included employees calling in sick or not coming to work,” Black Box said.
Black Box noted that while more than 80% of restaurant companies had paid sick leave policies for restaurant management and corporate staff, only about 41% offer paid sick leave to their restaurant hourly employees.
“Many restaurants were already preparing for a potential escalation of the threat the virus poses to the industry,” Black Box noted. “By March 13, 60% of restaurant companies that completed the survey said they had already established contingency plans for potential restaurant closures.”
At the time, only 33% of restaurants in the upscale casual and fine dining restaurant said they were prepared for closures, Black Box said.
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