For the past couple of months I’ve been helping support a lot of the restaurants that I like in my neighborhood. Some have done better take-out business than others. Some are more dependent on daytime lunch crowd than others and have not done well. A handful have already announced they aren’t coming back.
It will take years to sort out what the changes are, but some things aren’t going to go back to where they used to be. Restaurants have never been a great business and have a very high rate of failure. Few own the real-estate they exist in, which means they have extremely high fixed long-term costs (rent, etc.) but a very fickle and easily lost clientele in the best of times.
Things I can forsee hapenning:
- More marginal businesses, particularly those that depend on only one source of business (like lunchtime business in commercial districts) may just find that they can’t justify things anymore, particularly if work itself changes significantly.
- Landlords are going to have to take some of the risk. They’ve been happy to take the upside in good times (in extreme cases, even demanding a portion of revenues) and in bad times, they’re going to have to eat some losses. Given the length of commercial leases, this will be a slow change, but it’ll happen.
- Restaurants will be more of a luxury. They were when I was a kid, and they will be again. I’ve gotten really good at cooking for myself in the past few months and I’m eating healthier and cheaper. I’m not likely to go back.
- This will be compounded by the fact that everybody has gotten a major shock. Even those of us in relatively “safe” work, are saving more and spending less.
So yeah, I hope my neighborhood places survive. My neighborhood is probably one of the ones where they will, just because of the unusual demographics compared to most of the country. But I suspect a lot of these places will not.