As more than 35,000 restaurateurs in Mexico City waited for the local government to sound the all-clear signal allowing them to reopen their dining rooms, operators in the United States earlier this month were taking measures to help deal with the growing swine flu outbreak at home.
Foodservice operators here have been communicating with employees and franchisees, answering questions and providing information about the outbreak, while also recommending steps they can take to reduce the spread of the virus.
The outbreak, a new strain of the type A influenza virus known officially as H1N1, so far has resulted in one death and hundreds of confirmed cases in dozens of states across the nation, according to Atlanta-based Centers for Disease Control and Prevention. The first cases were identified in Mexico.
At press time, the World Health Organization, which declared that the disease is spreading rapidly, had warned that a global pandemic from the virus appears imminent. A pandemic occurs when a new virus is identified for which most people don’t have natural immunity.
Many in the U.S. restaurant community worry that their businesses could be severely affected by a pandemic, which likely would cause consumers to avoid public places and potentially could spark mass closings like that in Mexico City.
“The impact on the industry will be directly related to how severe and how deadly the outbreak will be,” said Dennis Lombardi, executive vice president of foodservice strategies for WD Partners, a Columbus, Ohio-based consulting firm specializing in design and development. “If it’s not as deadly as people first believed, it will be a blip on the radar screen.
“But if it’s a real pandemic, it will have people hunkering down in foxholes to minimize their chance of exposure.”
Dr. Bruce Cords, vice president of food safety and public health for Ecolab in St. Paul, Minn., agreed, saying: “It’s not really about the total number of cases. It’s about how severe they are. If we don’t see a lot of hospitalizations, that would be good. And so far the [U.S.] cases appear to be milder than those in Mexico.”
Aftan Romanczak, director of research and development for Steak-Out Char-Broiled Delivery in Norcross, Ga., cautioned, however, that, “So far the cases [of H1N1] have been mild. But the fear factor is beginning to build.”
Travel also could be impacted if a pandemic is declared. The European Union already has issued a travel advisory urging its citizens to curtail unnecessary travel to the United States and Mexico. U.S. officials called the advisory unwarranted.
Les Cappetta, president and chief executive of SSP America, the airport foodservice concern based in Landsdowne, Va., said concessionaires are concerned about the EU’s recent warnings.
“The biggest issue at this point could be foreign travel advisories,” Cappetta said. “For example, the EU has recommended that Europeans avoid New York, which is odd because the virus has been tracked to 20 students at a Queens school who field-tripped to Mexico in the recent past.
“We can’t tell what impact the warnings will have or what the lag time for impact might be,” he said. “On a good note, however, consumer confidence [in the economy] is rising and that bodes well for travel.”
John Fox, a senior vice president of PKF Consulting, a hotel advisory firm based in New York, said it’s too early to tell if the outbreak has had any effect on travel so far. “There’s an undercurrent on whether there will be an impact or not, but I haven’t heard of anything yet,” he said.
Fox acknowledged the potential for damage to the travel industry, however, citing the 2003 outbreak of another widespread epidemic, SARS—severe acute respiratory syndrome—which cost Canada about $1.1 billion in lost tourism revenue, according to the Conference Board of Canada
Officials also said it was too early to determine the financial impact on the restaurant industry, although Robert Derrington, an analyst with Morgan Keegan and Co. Inc. in Memphis, Tenn., said the outbreak “threatens to restrict travel and leisure activities where people gather.”
Noting that any effect on public restaurant brands probably would not become apparent until after companies reported their second-quarter results, he indicated that casual-dining operators could be vulnerable because consumers might be wary of gathering in groups in public spaces. Fast-food chains, he said, would probably be less susceptible because of limited person-to-person contact.
Derrington also speculated that public companies with locations in states along the U.S.-Mexican border with Mexico, including California, Texas, Arizona and New Mexico, would be the first affected. Public brands he cited as having potential exposure include The Cheesecake Factory, Darden Restaurants, Brinker International, Chuck E. Cheese’s, California Pizza Kitchen, Jack in the Box and Sonic.
Some operators, however, said they were already feeling the effects of the flu. CEC Entertainment Inc., the Irving, Texas-based parent of the 542-unit Chuck E. Cheese’s chain, said fears surrounding the outbreak could have been responsible for an 8-percent decline in same-store sales during the fourth week of April and a 20-percent drop for the first three days of the last week of the month.
Jason West, an analyst for Deutsche Bank North American, said the risk to restaurant traffic was growing, and specifically cited casual-dining chain Texas Roadhouse Inc. as a brand that could be hit hard because 20 percent of its company-owned locations are in Texas, just across the border from Mexico.
Operators with locations in Mexico City, where only take-out facilities were allowed to remain open, already are feeling the brunt of the epidemic. Miami-based Burger King said it has been hurt by the closing of the dining areas in its 118 Mexico City-area locations, and has reduced its full-year profit outlook as a result of the expected sales decline related to the epidemic.
Local fine-dining operator Jordi Escofet, who owns the award-winning La Cava in Mexico City, said he has closed his restaurant according to orders. “We have been told to remain closed until May 6, but I think the government will probably prolong that.”
In the interim, he said he is keeping some of his staff busy addressing maintenance needs. Escofet said he believes some hotel restaurants in the city have been allowed to remain open to feed their guests.
Michelle King, a spokeswoman for Dunkin’ Brands Inc., reported, “At this time all of our stores in Mexico City are open and limiting sales to takeout as instructed by the local authorities.”
Spokespersons for both Brinker International and Carlson Restaurants Worldwide said the two casual-dining companies have outlets in Mexico City, all of which are adhering to local directives to curtail dine-in business. Both companies are monitoring the situation closely.
Meanwhile, U.S. restaurant companies are taking whatever action they can at home to prepare for the possibility of a pandemic. Stacey Sullivan, the public relations manager for Brinker, said the company is reiterating its proper hygiene procedures for restaurant personnel.
And, she added, “For the safety of their co-workers and our guests, managers at Brinker restaurants worldwide will exclude any team member from working while exhibiting flu-like symptoms.”
Amy Freshwater, vice president, corporate communication and public relations for Carlson Restaurants Worldwide, said T.G.I. Friday’s parent has “an extensive pandemic plan that we are following for our brands. At this point we have activated the communication component…and are keeping our U.S. and international restaurants and franchisees aware of the facts as we know them.”
Jim Greco, chief executive of Burlington, Vt.-based Bruegger’s Enterprises Inc., said two communications have been sent out to the brand’s locations and franchisees, reiterating policies and practices, which include hand-washing procedures, washing tables every 15 minutes, changing towels and cleaning utensils.
At Steak-Out, Romanczak said several bulletins have been broadcast to stores, providing updates and facts on the outbreak. For example, the bulletins advise staffers to tell nervous customers that pork products are safe and that cooking the meat to an internal temperature of 160 degrees Fahrenheit kills the flu virus as it does other viruses.
Romanczak said in the advent of a pandemic, the company, which specializes in delivery, likely would not close down locations and would continue to deliver products to homes and offices. “So we’re working on procedures that will protect our employees,” he said. “We need to find ways to minimize the [physical] contact between the customer and the employee.”
Ecolab’s Cord said the cleaning, sanitation and maintenance firm has been fielding a multitude of questions from its restaurant customers since the outbreak was announced in late April. Because Ecolab had established protocols and policies in the wake of the virally similar Avian flu scare several years ago, it was positioned to deal with this outbreak, he said.
Among other things, Ecolab is advising customers to pay more attention to common touch points, Cords said. “For instance, customers are using disinfectant on their tables rather than an all-purpose cleaner,” he said, noting that the virus is more likely to be transmitted through touch than through airborne modes like sneezing.— [email protected]
