California Restaurants Prepare For June Reopening

Speaker 1: 00:00 The pandemic shutdowns for businesses across California are almost over after a roller coaster year of partial openings. And reclosing the state has now set the date June 15th for an almost complete resumption of business activity restaurants, which are among the hardest hit sectors. Now have about 10 weeks to gear up for reopening, but how will the pandemic have changed the post pandemic outlook for eateries in San Diego and across the state? Joining me is John Condi, he's president and CEO of the California restaurant association. And John welcome. Speaker 2: 00:37 Thanks for having me. Did Speaker 1: 00:38 You expect the governor to scrap the tears and move for reopening in June? Speaker 2: 00:44 Well, we expected it at some point, but, um, it came sooner than we had anticipated, so it was a welcome surprise for sure. Speaker 1: 00:50 And what does this decision mean for the restaurant industry? Speaker 2: 00:54 Well, I mean, in the sort of in the immediate future, it means restaurants will, first of all, have a date, uh, that they can focus on, which has been a great source of frustration, just not having any kind of certainty throughout this pandemic. So here is something that seems to serve. So, you know, um, on the list of things to do the top priority is getting the employees back. I mean, in many cases, retrained, hiring employees, um, you know, uh, that let's say, I mean, a lot of restaurants have lost contact with many of their employees, so getting them to come back and retrain is critical and then firing up the supply chain. I mean, we've all sort of heard about, you know, the, the plight of the ketchup packet. Um, I mean, it's not just catch up, there's other, um, you know, commodities in the, in the food space that, um, you know, I think we're all trying to get a handle on what's available and, um, and really what consumers and how will consumers respond to the reopening? Speaker 1: 01:50 Are you hearing from the members of the restaurant association? What are their big questions and concerns? Speaker 2: 01:56 I think the challenge and the challenge is right now, um, getting employees to come back, um, and for, you know, there's multiple reasons why, um, that's, that's a challenge and in some respects it's because, um, many employees are receiving unemployment benefits and they, um, you know, they are making a decision that it's more income for them to work less than a certain number of hours and continue to draw on those unemployment benefits. And at some point, of course, those run out. So we may see that change, but then also there's, you know, workers that were in the industry that have just left the industry altogether or moved out of the state or out of the area back in with their parents. So there's a whole lot of variables there, but that seems to be the, the top challenge for restaurants now. And then, you know, there's the unknown variables, uh, especially in areas where, you know, there's, um, a lot of, you know, pre pandemic tourist traffic when the tourists will be back in business districts, when will the business travelers come back and then even in the downtown urban cores where there's, you know, tall buildings with lots of workers, um, how many of them will be coming back in the office right out of the gate, you know, because our industry, um, you know, we service a lot of these areas and, you know, if there's no customers, no workers where a lot less of them, that's going to fundamentally change, you know, uh, how restaurants, um, you know, adjust to the, the new normal. Speaker 1: 03:24 Do you have a clear understanding of what guidelines will remain in place even after June 15th, for instance, will servers still be wearing masks? Speaker 2: 03:34 It appears that way for now. I mean, I guess we will see two months away that, that that could change. But, um, but so far, uh, as our understanding is that there will be a still BA mass requirement, which, you know, I, for us it's, um, if that's what, what it takes to get us open, then, uh, you know, we, we accept that. Um, and I think that there is also an element to the pent up demand, certainly customers who are going to come back, uh, immediately, but, you know, there's going to be some, um, customers that are maybe a little more timid about getting back into a restaurant. And if, uh, the mask requirement helps them realize that it's safe, um, then we, we accept that. But for now, yeah, it looks like the mask will still be required. Speaker 1: 04:19 And what about the plastic barriers? Those plastic barriers installed during the pandemic? And what about spacing guidelines? Have you gotten any heads up about any of that? Speaker 2: 04:28 We have not engaged, uh, the health departments since the announcement yesterday. Um, and, and I fully suspect that, um, each health department may do things a little differently. Uh, and, you know, I suspect in the coming days, weeks that, um, the County health departments will be hopefully, um, adjusting their, um, their protocols for, uh, how restaurants operate Speaker 1: 04:55 10 weeks, you know, is still quite a ways away. Do you think there are some businesses, some restaurants that won't be able to hold on that long? Speaker 2: 05:01 Well, uh, you know, yes. I mean, you know, we hear every day, every day that goes by, um, there's restaurants that are just, you know, um, you know, on the edge and, um, and many of them fall off. So we fully expect that in between now and June 15, there will be more restaurants that just have to throw in the towel. Um, and that's, you know, we, we expected about 30% of the, uh, restaurants that existed prior to this pandemic would probably not survive. And, you know, I think after, after the opening, you're likely to see more restaurants closed and hopefully not a large wave, but restaurants that, you know, perhaps I serve coffee and breakfast, you know, in an area where there the need isn't that great, or the office workers haven't bounced back. So, um, yes, uh, I mean, um, there's likely to be more restaurants that are go under. Um, thankfully, um, the second round of PPP funding, um, is starting to, um, um, take hold in in California. And a lot of restaurants are receiving that funding and, and our hope is that that will help many of them survive, you know, for the next few months, Speaker 1: 06:12 San Diego, along with some other counties have moved now into the orange tier. How does that change the restrictions on restaurants right now? Speaker 2: 06:21 Well, I mean, th that's, um, yeah, it was just yesterday. I believe that, uh, San Diego moved into the orange chair, uh, which is, um, significant for our industry in that, um, usually the, when you talk to restaurant owners and he asked them at what, at what capacity are you profitable? And, you know, the answer usually is around 50%. So as these dining rooms have been limited at 25%, and, you know, some restaurants may be lucky enough to have a parklet or a sidewalk or a parking lot that they could use for outdoor dining, but, but, uh, for the most part at 25% capacity, they're losing money. Um, you know, moving to 50% will certainly increase the odds that restaurants can survive to that point where we get to June 15 and restaurants are open, you know, uh, at full capacity. Uh, but you know, getting to 50% is significant. Speaker 1: 07:13 And I've been speaking with John Conde, he's president and CEO of the California restaurant association, John. Thanks a lot. Speaker 2: 07:20 Thank you.