Billion-dollar loss for restaurant industry in 2020

Restrictions, lack of holiday parties means businesses miss out on busy time of year
December 24, 2020

Story Location:
Rehoboth Beach, DE 19971
United States

Heading into 2020, SoDel Concepts President Scott Kammerer said he and other restaurateurs across the state, but especially in the Cape Region, were expecting it to be a banner year.

“We were coming off one of the best years the restaurant industry had ever had,” said Kammerer, a 30-year veteran of the food service industry, of 2019. “The first couple of 2020 months began strong, too. Then COVID hit in March and everything changed.”

Nine months later, Kammerer, who is finishing the first year of a two-year term as Delaware Restaurant Association board chairman, said industry sales as a whole are down $1 billion from last year.

“We were pretty much decimated this year,” he said.

As DRA chair, Kammerer said he spent a lot of this past year working the phones with legislators who were making decisions that affected all the state’s restaurants. He said he hasn’t always agreed with the decisions made, but he appreciated the access.

“Delaware is a really small state, and one of the benefits is the access to decision makers. They always took our calls. For that, we’re grateful,” said Kammerer.

Kammerer said a decision was made early on at SoDel that as a company it was going to double down on the staff and restaurants by remaining open and not laying people off. There was a commitment for the long term, he said.

“We’ve always seen ourselves as fortunate,” said Kammerer, adding that decisions made years ago allowed the company to weather the storm this year. “There have to be good financial controls in place when the times are good, so a business can survive when times are not good.”

Looking to 2021, Kammerer said he anticipates spending a lot of time making sure legislators know the state’s restaurants still need their support. He said topping his to-do list is making sure that restaurant employees are in the appropriate tier to receive the COVID-19 vaccine, that grants and loans are available for struggling restaurants, and that restaurant restrictions reflect restrictions for other retail businesses.

“We don’t want any more or any less,” said Kammerer about restrictions, adding that he wants to see as many restaurants survive as possible. “The more restaurants the better. We build each other up.”

Specifically regarding the restaurants under the SoDel umbrella, Kammerer said the biggest difference this year right now is the lack of Christmas and New Year’s Eve parties. Still, he said, community support has been wonderful because people have been buying more gift cards than usual.

“The community support is always phenomenal,” said Kammerer, adding the company has plans to move forward with opening more restaurants in the next 18 months.

Restrictions harder on restaurants with smaller footprints

Rehoboth Beach restaurateur Megan Kee said the restrictions are hitting restaurants with a smaller footprint harder than larger restaurants. Kee owns and operates three restaurants in downtown – Houston-White Co., La Fable and Dalmata.

Kee said she would close all three restaurants if that’s what was required, but since they’re allowed to stay open, she would like to see changes made. Using La Fable as an example, she said, at 30 percent capacity she’s losing out on potential customers because there’s still room available for more tables at the 8-foot minimum distance.

Kee said she would like to see a change made allowing restaurants up to 50 percent capacity if they can still meet the social distancing requirements.

Kee said for small restaurants like hers,  the same number of employees is needed at 30 percent capacity as at 100 percent. There’s only so much a small restaurant can stop doing before it makes sense to close, she said.

Kee said this is typically the busiest time of the year for her restaurants – special holiday menus with customers willing to spend more on higher-priced items to celebrate the holidays and the year’s end. However, this year, there won't be special holiday menus, she said.

“The meals and experience will still be special, but it’s impossible to know how much and what product would be needed,” said Kee. “It’s just not worth it.”

Despite the restaurant industry's many unknowns, Kee said she is still in a better place than a lot of other people. The day of the interview, she and her mom Winnie Kee were buying clothes and toys for needy children.

Kee said she and her team donated 300 dinners at Thanksgiving and plan on donating another 600 over the coming week. 

“This is the first year shelters and orphanages have reached out to me for help. There are still people who need more,” said Kee. “We’ll survive, but if we’re going to go down, we’re going to go down helping those who need it.”

Restaurateur pivots with restrictions

With restrictions on restaurants frequently changing this year, Heirloom owner Meghan Lee said she’s had to find ways to adapt.

“It’s been very emotional,” she said. “When the governor first shut everything down, I thought it was going to be two weeks. A lot of people thought that. No one knew.”

But the pandemic raged on, and while restrictions were loosened throughout the summer, she said it was still a challenge to find a new way to do business. She closed the restaurant for three-and-a-half months and did’t reopen until mid-June. During the earlier days of the closure, she paid attention to what other restaurants were doing and worked on a plan that would best suit her restaurant, which has been an in-person, fine-dining restaurant utilizing fresh, locally sourced ingredients since it opened in 2015.

“When [Carney] said restaurants could reopen for takeout, I didn’t take that step, because we’ve never been a takeout restaurant and I didn’t know if it would translate,” she said.

Instead, Lee adapted the takeout concept to something that fit her restaurant and staff. In late March, she unveiled the first of what would be many pop-up menus. Customers could preorder a few days in advance off a small menu featuring bread, soups, sides, a cheese board and desserts. As the restaurant remained closed, Lee and her chef Matt Kern continued to roll out new pop-up menus, often matching them with spring holidays like Easter and Mother’s Day. They were so popular, Lee said, she had to cut off orders.

In hindsight, she said, closing the restaurant for nearly four months was a smart decision.

“I had to do what was best for Heirloom,” she said. “I would’ve financially drained myself trying to do something that I didn’t know would take off.”

When she finally reopened just before the Fourth of July, the timing was perfect and so was the weather.

“Summer was insane,” she said. The outdoor patio seats about 40 people, and she was turning the tables over three times a night.

“The patio was my saving grace,” she said.

As summer faded into the shoulder season, the patio business continued to boom, thanks to a warm and dry fall.

She’s now trying to encourage her customers to eat inside, where they are following all protocols for a safe environment.

“We are safe,” she said. “We’ve always sanitized tables. Anybody who’s worked in a kitchen knows you wash your hands 150-200 times a day.”

When Carney announced new restrictions Dec. 14 that rolled indoor dining capacity back to 30 percent, Lee said, he instilled fear in people, sending a message that restaurants are not safe. She said that’s hurt business during the holiday season, when employers typically take their staff out to dinner, often in small groups of fewer than 10 people.

“Those are the little things that push me through the holidays,” she said. “And we’re not seeing that this year.”

Heirloom will forge ahead, though, offering another pop-up menu for Christmas Eve as well as in-person reservation dining on New Year’s Eve.

In the new year, Lee plans to close again for four weeks to regroup. She’ll use the time to survey the landscape, spruce up the restaurant, and get ready to reopen shortly before Valentine’s Day, when she hopes restrictions will be loosened a bit.


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