Speaker 1: It's Tuesday, May. I'm Oscar Amrrors from the Daily Dive
Speaker 1: podcast in Los Angeles, and this is your daily coronavirus update.
Speaker 1: As the country continues to reopen for business, one of
Speaker 1: the hardest hit industries will still have a difficult time recovering.
Speaker 1: Restaurants will see a long, slow ramp up back to
Speaker 1: the way things were. Real time industry data is showing
Speaker 1: that while people are starting to get out there, restaurants
Speaker 1: are only seeing a fraction of the business they used
Speaker 1: to have, partly due to capacity limits for social distancing.
Speaker 1: The estimates are still dire as to whether some businesses
Speaker 1: can remain open after the comeback. Jordan Weissman, senior economics
Speaker 1: reporter at Slate, joins us for more. Thanks for joining us.
Speaker 1: Jordan's Hey, thanks for having me on. I wanted to
Speaker 1: talk about restaurants and how they're gonna be faring as
Speaker 1: states are reopening. I think all fifty states now are
Speaker 1: starting to reopen in some capacity. The restaurants scene is varying,
Speaker 1: obviously state by state, but the restaurant industry really one
Speaker 1: of the hardest hit industries in this whole coronavirus pandemic.
Speaker 1: There's been a lot of restaurants who have managed to
Speaker 1: stay open just doing delivery and take out, But there's
Speaker 1: a ton of other restaurants who have clothes throughout this
Speaker 1: and might never reopen. And as we're seeing some states reopening,
Speaker 1: we're getting some headlines and some good shots of people
Speaker 1: actually making out to restaurants, but it could be a
Speaker 1: little misleading. We get a lot of real time data
Speaker 1: from the industry, from places like open table and other
Speaker 1: places to do analysis on restaurants and people eating out,
Speaker 1: and the numbers aren't all really, they're just yet. So Jordan,
Speaker 1: tell us a little bit about what's going on with restaurants.
Speaker 1: You know. The first thing I want to say is
Speaker 1: before you even get into the numbers, some people ask
Speaker 1: me why do we care so much about restaurants specifically
Speaker 1: right A lot of different small businesses are hurting right now.
Speaker 1: Why is it such a big deal how the food
Speaker 1: industry is doing. And one very simple and not technical
Speaker 1: answer to that is people like to eat out. Like
Speaker 1: a restaurants are a huge part of just like the
Speaker 1: cultural fabric of cities and towns, and there are part
Speaker 1: of what makes going out on a weekend fun. People
Speaker 1: can are about these They with def emotional attachment to restaurants,
Speaker 1: but also there are economic reasons to care about this industry.
Speaker 1: It's a huge employer. There are more than six hundred
Speaker 1: thou was in full service restaurants in the country that
Speaker 1: haven't essentially shut down in some capacity or another, partially
Speaker 1: or entirely because of this crisis. There are millions of
Speaker 1: jobs attached to them. And the more of these businesses
Speaker 1: that go busts, that don't make it through this crisis
Speaker 1: or its immediate aftermath, the longer it's going to take
Speaker 1: for the whole economy to heal. The more small businesses
Speaker 1: that disappear and can't bring their workers back, the longer
Speaker 1: it's going to take us to kind of crawl out
Speaker 1: of this hole we've ended up in. So it's important
Speaker 1: how quickly restaurants can recover, and at the same time,
Speaker 1: you have to balance their concern for their business with
Speaker 1: public health issues. Right. So, what we're seeing is that, yeah,
Speaker 1: there are all these stories about how in Georgia, restaurants
Speaker 1: in some places are getting packed again, and how you know,
Speaker 1: in Texas you're seeing people show up at dinners and stuff.
Speaker 1: But if you actually look at the numbers, they're not
Speaker 1: quite as encouraging. You mentioned open table, which is actually
Speaker 1: a surprisingly youthful data source right now, because they track
Speaker 1: obviously reservations made on their platform, but they also track
Speaker 1: walk in diners and people who make phone reservations, because
Speaker 1: people who run restaurants use the software for a bunch
Speaker 1: of different tasks, and they'll tell you that right now,
Speaker 1: the number of diners at restaurants in places like Georgia
Speaker 1: are still down about eighty percent in Florida, same thing
Speaker 1: in Oklahoma, which is doing as well as anyone it's
Speaker 1: closer to. And you can look at other data sources too.
Speaker 1: There's credit card activity data that suggests that of restaurants
Speaker 1: are entirely closed in places like Texas and Alabama and Arizona,
Speaker 1: which has been a lot of handfair about how these
Speaker 1: states are reopening again. That's a fifth to a quarter
Speaker 1: of restaurants they are not doing any business at all,
Speaker 1: not even doing takeout. Again. There's this one company called Toast,
Speaker 1: which is essentially a point of sales software provider. You know,
Speaker 1: when you go and swipe your credit card at a restaurant,
Speaker 1: they are the ones who are recording your sale or
Speaker 1: recording what was charged on your check. According to their data,
Speaker 1: total spending year over year at the well early bird
Speaker 1: states as I refer to them in my teeth, are
Speaker 1: still down again. Total spending of restaurants is down year
Speaker 1: over year. In states that have reopened early it's gradually recovering,
Speaker 1: but those are not the kind of numbers that are
Speaker 1: going to sustain a business if that continues. A lot
Speaker 1: of them are not going to survive with the reopening,
Speaker 1: and a big part of that, obviously is the social
Speaker 1: distancing measures that are put in place. You know, restaurant
Speaker 1: is not going to be able to fill to capacity
Speaker 1: anytime soon. Just looking at kind of where all the
Speaker 1: states stand right now, there's a handful of states that
Speaker 1: are letting restaurants open at fifty percent capacity, but the
Speaker 1: vast majority of them are either twenty five or thirty
Speaker 1: three percent capacities, which you can have in there. So
Speaker 1: a lot of times these restaurants, depending on how many
Speaker 1: covers they have throughout the night or throughout the day,
Speaker 1: they're barely meeting the expectations that they need to keep
Speaker 1: the restaurant open and to make any type of profit there.
Speaker 1: So these capacity limits are going to be hurting them
Speaker 1: for some time to come. Leading it's going to be
Speaker 1: a long, slow recovery for them because they're not gonna
Speaker 1: be able to hit that's been very quickly. A restaurant
Speaker 1: can handle having half the three quarters of its tables
Speaker 1: empty on a Monday night, it cannot handle it if
Speaker 1: that's every Friday, Saturday, and Sunday. They will not survive
Speaker 1: that way. It's that clear and simple. And so the
Speaker 1: question is how long will these social distancing measures have
Speaker 1: to stay in places the stake of public health. My
Speaker 1: guess is probably for a while. Even in places where
Speaker 1: the number of infections is fairly low, people are nervous.
Speaker 1: They want these protections in place, and so do the
Speaker 1: local officials. And then second is what else can they
Speaker 1: do to make money. One option that's promising is to
Speaker 1: expand the amount of outdoor seating for the summer, and
Speaker 1: that seems to be what I'm told has happened in
Speaker 1: South Carolina, which is probably having one of the quickest
Speaker 1: recoveries right now. Restaurants in Charleston are being given a
Speaker 1: lot of sidewalk space and that's allowed them to start
Speaker 1: making up business a little bit quicker. But to me,
Speaker 1: it seems pretty obvious that they're going to have to
Speaker 1: be some longer term support programs in the government in
Speaker 1: order to make all these businesses survive or at least
Speaker 1: tried to water until things get a little bit more
Speaker 1: favorable for them. So far, what the data is showing
Speaker 1: is that is kind of a good news bad news scenario.
Speaker 1: It's good news that the states are reopening their restaurants.
Speaker 1: People are getting out there, although not to the capacity
Speaker 1: that we wanted to just yet. But on the flip side,
Speaker 1: the bad news is that how long can these restaurants
Speaker 1: be sustainable that way? And in a lot of cases
Speaker 1: it doesn't seem that they will be able to survive.
Speaker 1: So it's this tough balance that needs to happen. I
Speaker 1: would even go a little further and say part of
Speaker 1: the good news here is also that it doesn't seem
Speaker 1: like people are being too irresponsible. Right. We've seen all
Speaker 1: those pictures of and I guess you know, videos of
Speaker 1: like crowds running back to brunch or whatever, But it
Speaker 1: doesn't seem like that's the norm. Places are not packed
Speaker 1: to capacity. Businesses and diners are gradually returning to the
Speaker 1: dinner table, and so that's not a bad thing if
Speaker 1: you're worried about public health. Just the question is, since
Speaker 1: everyone is worried about public health, nobody wants to take
Speaker 1: crazy risks. How do we make sure that these vital
Speaker 1: businesses that we all love and cherish don't just get
Speaker 1: wiped out. Yeah, definitely something big point of concern for everyone.
Speaker 1: Jordan Weissman, senior economics writer at Slate, Thank you very
Speaker 1: much for joining us. Great by Oscar Ramirez, and this
Speaker 1: has been your daily coronavirus update. Don't forget that. For
Speaker 1: today's big news stories, you can check me out on
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