Restaurants have seen a significant drop in business as a result of the coronavirus (COVID-19) outbreak. With stay-a-home orders in place in communities across the country, many restaurants are closed, or only serving food for delivery or takeout.
Jose Garces is a longtime chef and the second-season winner of The Next Iron Chef with several restaurants in Philadelphia, New Jersey and New York City. He’s also one of the founders of the Garces Foundation, along with his wife Beatrice. Chef Garces called into Wharton Business Daily to speak to host Dan Loney about how restaurant owners can navigate this difficult time for the industry.
1. How has the outbreak affected your restaurants?
“As you’re aware, the restaurants have been ordered to be closed, outside if you’d like to do delivery or take out. That impact is pretty strongly felt in that there were layoffs that occurred. We’re starting to look ahead already, although I think we’re still obviously in crisis mode. I think our industry is going to have to really take a look and examine how people eat, how they consume food going forward because obviously this is going to leave a lasting impression.”
“Unfortunately, we have had to lay off a lot of hourly employees. Then, for some key managers, we have established a furlough program, as well as some ongoing hours in two of our existing locations. At The Olde Bar in Old City, we’re doing delivery only. We’re rotating some managers through and some hourly folks so they can continue to get paid. Buena Onda, our fast casual taqueria on Callowhill, has actually done pretty well. We’ve been able to keep it open because about 50 percent of the restaurant’s core business is delivery. Then, at Distrito in West Philadelphia, we’ve also been able to keep a few employees on as far as doing the delivery part. Unfortunately, a majority of our workforce has been laid off. We’ve kept in close contact with them. We hope to bring them back, and call them as soon as all the bans lift, and we can safely go back to work.”
2. As a business owner, how are you navigating this unique time?
“The virus is so complex that the way it is passed on through the airborne way, it makes it very complicated to even really think about business at this point. It’s really more about safety. I think the way we’re approaching it is: how do we plan best for the future when the virus has hopefully passed and we’re in a safe place? How do we best position our employees when our business resumes. There are a lot of factors. That’s where we’re at in terms of strategizing. How do we really position ourselves to bring everything back and be as robust as possible?”
3. How can restaurants help with community outreach?
“(Restaurants have the ability to help the community) as it relates to food production and goods because that’s the other thing that’s been lost. I think there was a bit of a panic in the markets. We’ve heard about toilet paper and paper towels, and all these essential goods are being snatched up. (My) restaurants have capabilities to possibly sell goods or distribute goods and foods. I think there is something around that. Again, if this situation gets worse, the restaurant community should be able to mobilize quickly as outposts for goods, foods, and some limited services, while operating in a safe way.”
4. Has this experience made you rethink any future business plans for new restaurants?
“This event undeniably will change our industry and how food is prepared, delivered, and how it’s consumed. We have to really take a hard look at the future of the business and how people are going to react to it. There is a fear of gathering. If you have a 100-seat restaurant and it’s full on a Saturday night, it may take some time for everyone to feel like (that would be) safe again. Then there is this other concern: will that consumer ever feel safe in that restaurant? Do we have to start thinking about downsizing our business models, and go to more of a quick-serve model, delivering that same restaurant quality food experience, but in a different way? That’s certainly where I’m headed and it’s what I’ve been thinking about in terms of the future of our industry. These experiences already exist out there, but I think they’re just going to expand quite a bit more.”
— Emily O’Donnell
Posted: March 30, 2020