The restaurant industry is in tatters, Mike Barnaart, owner of Walldorff Brewpub and Bistro in Hastings, said Wednesday after Gov. Gretchen Whitmer announced Feb. 1 as the next possible date for restaurants to open for in-person dining.
This extension of a 58-day “pause” on indoor dining is wrecking havoc with these local businesses, Barnaart said.
Julie Fox, owner of Curly Cone, near Gun Lake, said, based on state directives thus far, she has zero confidence that restaurants will re-open for in-person dining Feb. 1.
The way Whitmer has been handling restaurants “could not make it any more miserable on restaurant owners,” Fox said.
The ban on indoor dining, which had been set to expire Friday, was enacted to slow the spread of the COVID-19 which has killed more than 14,000 in Michigan since last March.
Health officials have said three key factors inform their decision on easing restrictions: case rates, hospitalization rates and test positivity.
But a Bridge Michigan analysis of national coronavirus statistics shows that Michigan has some of the lowest case, hospitalization and positive test rates in the country. As far as cases, only three states have lower rates; as far as hospitalizations, Michigan ranks 35th; and as far as testing, Michigan ranks 39th.
Even so, all rates in Michigan are higher than they were in the summer, when there were fewer than 1,000 daily cases and less than 700 patients hospitalized statewide for the coronavirus.
“While indeed the numbers in Michigan are trending down and Michigan is doing well compared to other states, I think we need to be cautious during these next two weeks or so,“ said Joseph Eisenberg, an epidemiologist at the University of Michigan.
And epidemiologists and others point out that, while Michigan’s restrictions have impacted case rates to some degree, exactly how much is unclear.
Other factors affecting case rates include public awareness, behavioral changes and even weather, they said.
On Tuesday, the Michigan Licensed Beverage Association released a statement on Facebook saying the re-opening date was pushed back until Feb. 1 to give owners time to work out their supply chain issues and figure out staffing.
A re-opening of in-person dining will “likely include a limited capacity and curfew, and then possibilities for restaurants that take additional public health measures to have a higher capacity limit,” the MLBA statement said. “Although we are disappointed with the idea of being closed for another two weeks, finally seeing a light at the end of the tunnel is certainly reassuring.”
But the closure of indoor dining is creating huge problems for local businesses – and the biggest challenge is getting people back to work in the restaurant industry, Barnaart said. Without those people, he can't even assemble a staff to open for in-person service.
"A hard start date is the best-case scenario for us,” Barnaart said. “We have to replenish inventories, update our menus, and get staff back.”
“It’s been brutal and tough, but we will make it,” Fox said. “Me and my team are too stubborn not to make it. ...I have 30 people relying on me to keep my restaurant going so they can put food on the table for their families.”
The closure has put a similar strain on Barnaart’s employees. When the second shutdown came Nov. 18, he had to lay off one of their cooks. “He applied for unemployment the next day, but he still hasn’t seen a penny,” he said.
Barnaart said he only has a handful of people on staff right now, meaning that – even if the restaurant industry had the go-ahead to begin in-person dining on Friday – they would not be able to re-open.
“A lot of people think we can just flip a switch and re-open, but it is not that easy,” he said. “We’re going to have to limit everything – our hours, menu, and even the days we're open – until we can build a staff back.”
Many people have left the restaurant industry in favor of jobs in other sectors, Barnaart said. The biggest issue, he said, is that people can’t return to the restaurant industry and be confident their job is stable.
Even with all the challenges, Barnaart said, they never came close to shutting down permanently. “We actually anticipated being in the situation we are now,” he said, “we’re financially sound.”
The Walldorff could stay open indefinitely, but he said he’s not anticipating another long-term shutdown.
“We’re OK for now, and we are anticipating a good re-opening,” Barnaart said.
Jack Nadwornik, owner of Tujax in Delton, said they have been experiencing similar challenges. “This has been a lot harder than the first shutdown,” he said. “It’s obviously affected us negatively.”
Nadwornik said he and his staff were looking forward to opening this month, but now he’s just hoping that he can re-open at least 50-percent capacity in February. But he added that he doesn’t think 50-percent capacity is likely.
Jennifer Heinzman, president of the Barry County Chamber of Commerce and Economic Development Alliance, said that, after speaking with state officials, she expected restaurants to open at 25-percent capacity Feb. 1.
In the meantime, Nadwornik said his staff has been offering carry-out service to stay afloat.
While they haven't been in danger of shutting down, Nadwornik said he’s heard of other places that are struggling.
“There are going to be places that will have to shut down,” he said, “But, hopefully, it won’t be as bad as some as the predictions say it was going to be.”
Fox said the Barry County Foundation should “get special recognition for helping us stay afloat.”
Led by foundation Chief Executive Officer Bonnie Gettys, $83,000 from the foundation's Feed Barry County Program fund money was divided up among 50 local restaurants in the form of gift cards. The gift cards were purchased for local restaurants and then gifted to the local veterans affairs office, Barry County United Way and local food banks. The cards are provided for families in need in a way that supports local restaurants.
In December, the Michigan Restaurant & Lodging Association released data that tracks the economic impact of COVID-19 on the hospitality industry in Michigan.
“The data is settled,” Justin Winslow, MRLA President and CEO, said. “It is fundamentally clear that the pandemic is decimating the hospitality industry in this state to a degree never seen or even imagined. While it will take several years and a stable economy to reclaim the size, impact, and opportunities produced by this industry, we have not yet reached the bottom.”
The MRLA survey shows that 5,600, or 33 percent, of Michigan restaurant operators said it is unlikely they will still be in business in six months; 89 percent of Michigan restaurant operators expect their sales to decrease during the next three months; and 63 percent expect their staffing levels to decrease over the same period.
The data also shows that 48 percent of Michigan restaurant operators say they are considering closing their restaurants until the COVID-19 pandemic passes, and 90 percent of Michigan operators say their profit margin is lower than before the COVID-19 outbreak.
Winslow released a statement on Dec. 7, 2020, saying that MRLA wasn’t “surprised by the governor’s decision” to extend the shutdown order, but they remain “exceptionally disappointed.”
“We firmly believe there is a better approach – one followed by 45 other states – that doesn’t use blunt force closure of a single industry to resolve a shared crisis,” Winslow said. “We maintain that a more nuanced approach that allows for limited indoor capacity with a curfew will result in greater compliance, better health outcomes and substantially reduced economic fallout.”
Tuesday, the National Restaurant Association released a nationwide survey of 6,000 restaurant operators and 1,000 customers showing national industry trends for 2020.
The three most common responses were that operators streamlined menus, sold groceries and offered alcohol-to-go to try and stay afloat.
“These food and menu trends didn’t offset the industry’s devastation, but they do illustrate the resiliency, innovation, and commitment of restaurateurs,” NRA senior vice president of research and knowledge Hudson Riehle said. “The pandemic served to accelerate many trends we were already seeing, while it taught more consumers how to digitally access the restaurant meals they wanted, so expect many of these innovations to be long-term trends and not fads.”
On Dec. 7, Sean Kennedy, NRA executive vice president of public affairs, sent a letter to congressional leaders regarding the restaurant industry: “For nearly nine months, restaurants — our nation’s second-largest private-sector employer — have been in an economic free-fall as a result of mandated closures and capacity limits due to the coronavirus pandemic. 87 percent of full-service restaurants - independent, chain and franchise - report an average 36 percent drop in sales revenue.”
Kennedy said that industry with an average profit margin of between 5 and 6 percent is unsustainable: “The future remains bleak. The tide of restaurant closures and bankruptcies continues to rise — sweeping away jobs in some of the most venerated independent and chain restaurants.”
Kennedy predicted that, as of Dec. 7, 17 percent of restaurants – more than 110,000 establishments – had closed.
“The vast majority of permanently closed restaurants were well-established businesses, and fixtures in their communities,” he said. “On average, these restaurants had been in business for 16 years, and 16 percent had been open for at least 30 years.”