Restaurateurs Deal with the New Normal

Khabar Magazine. June 2020.

The relentless march of Covid-19—and our measures to contain it—have ravaged the restaurant industry. From reinventing themselves and staying relevant to protecting customers, employee interests, and managing their suddenly shaky finances, here’s a look at how some eateries in the Atlanta area are coping with the effects of the pandemic.

The impact of the novel coronavirus on the restaurant industry has been devastating. When diners canceled reservations and events indefinitely, turning to their home kitchens, restaurateurs struggled to acclimatize to the unpredictable environment. In March, as shelter-in-place orders were issued all over the U.S., restaurant sales plummeted, and many Atlanta area restaurants were forced to take immediate action. While most places closed their dining rooms and switched to a take-out only model, some feared for their staff and decided to halt operations.

Giving back to the community

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Restaurants wasted no time in helping the community in the best ways they could. From giving employees cash advances and free meals, to donating food to low income families and first responders, many South Asian restaurants in the Atlanta area participated in initiatives for charitable contribution. The Walia Hospitality Group—composed of Masti, Café Bombay, Ashiana, and Signature Ballroom—sent meals to hospitals, police, and fire departments. They also participated in a Free Meals food drive in partnership with Global Mall, offering 1000 free meals a day for nine days, to those in need.“We are struggling as well, but we are blessed to have the logistics and something to give back. We wanted to give a sense of hope to people who need it the most,”  says Ricky Walia, the group’s chief operating officer.

Managing a financial crisis

Executive Chef and Chief Chaiwalla Meherwan Irani continued to offer takeout for two weeks, before closing all his restaurants, which include Chai Pani and Botiwalla in Atlanta, as well as MG Road and Buxton Hall Barbeque in Asheville. “We had to figure out how to make the new model safe for our staff, as well as our guests. So, we took a month off to set up the kitchen for social distancing and do takeout safely.”

Irani’s number one priority was his employees. Instead of laying them off, he furloughed everybody, so they could still keep their health benefits through the employer. It also allowed the staff to save the benefits they accrued, such as paid time off, vacation days, etc. “We have always had an emergency fund for our restaurant group, in order to help our staff in financial emergencies, where they don’t have credit card or other resources,” says Irani. Chai Pani’s staff quickly organized an auction fundraiser in early April, extending personalized experiences, such as dinner for ten cooked by Chef Daniel Peach at a private home, photography lessons, cocktail and bartending lessons, and much more. Around $20,000 was generated through the fundraiser and distributed to employees to help pay bills between the time they were furloughed and unemployment payments started coming in, which takes about a month.

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The Small Business Administration received a record number of applicantions for Economy Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP). Archna Malhotra Becker, the force behind Bhojanic restaurant, catering, and food truck for 23 years, applied for government aid right away, and was approved. However, she decided not to use the grant as it was too complicated. “The rules don’t make sense for restaurants!” she claims. “The PPP loans require you to bring back 75 percent of the workforce and use the funding within eight weeks. How can I hire 75 percent of my employees and still keep them six feet apart? Some restaurants only have 6-foot hoods, making it impossible to distance the cooking line,” she adds. Additionally, Becker found the program required owners to do a lot of paperwork, and there were heavy penalties for making mistakes.

Murugesan Perumal, the owner of Chennai Express, reopened his locations in Alpharetta and Norcross after roughly two months, on April 27. Though all shopping malls in Georgia were closed as per the mandate, Global Mall—where one of his restaurants is located—remained open as a community center. Perumal applied for the PPP loan but it was not enough to meet the expense of rehiring his employees and paying thousands of dollars in rent. “The numbers don’t add up. It is a one-time payout that is less than my one month’s rent. What am I to do while the situation persists?” he asks.

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Meanwhile, Walia still awaits payments for his loans that were approved weeks ago.

Innovating in times of need

While restaurants are operating at a fraction of capacity, they are looking at other revenue sources. Bhojanic already offers prepacked ready-to-serve meals through the online grocer, Subziwalla. Bhojanic is now offering pickup at its catering kitchen location on Lambert Drive, and drops off pre-ordered meals at different neighborhoods around Atlanta on different days of the week.

Since home cooking started trending mid-March, Irani has seen a threefold increase in sales of his Spicewalla Brand that sells herbs, rubs, and spice blends. Chai Pani also created new packaging, labeling, and branding for their prepared heat-and-serve meal options, marketed as Chai Pani Take Home. These curries, lassis, and chutneys are already available online and will soon be at brick and mortar grocery stores around Atlanta. Also, they are launching a virtual grocery store where patrons will be able to order staples such as milk, eggs, rice, and lentils, along with dinner.

Technology has allowed the world to stay more interconnected than before, and because of that we have been able to unite, connect, and handle this pandemic in a way we wouldn’t have been able to before. Another initiative Irani started is free cooking demonstrations on Instagram Live, called Chai Time. “It helps keep the brand alive, keeps me in the kitchen, and interact with the audience. It’s not just entertainment, it’s human connection!” he adds. Viewers can watch Irani via Instagram Live @MeherwanIrani every Wednesday and Saturday at 4 p.m.

Reopening for dine-in

On April 23, Georgia Governor Brian Kemp issued an executive order for ‘Reviving a Healthy Georgia’ with a rollout plan to reopen sectors of the state’s economy in response to Covid-19. Beginning at midnight on April 27, restaurants and dining services could reopen if they chose to, but needed to mitigate the exposure of Covid-19 to their customers and workforce. A list of precautions and guidance was given out to restaurants that included food safety, cleaning and sanitizing, employee health, and social distancing.

However, most restaurant owners found the reopening to be announced “too early” as the numbers of positive cases were still rising. The staff did not feel comfortable returning to work. Many older and vulnerable employees would prefer to receive unemployment benefits rather than put their health at risk for very little money.

Breakdowns in restaurant supply-chain prevented restaurants from being fully operational. Bhojanic’s Becker pointed out that she could not source basic supplies like toilet paper, sanitizing wipes, bleach, gloves, bags, and thermometers. Many of the products come from China and demand has exceeded supply. Her other concern is that the guidelines don’t make practical sense. It is not possible to keep social distancing in the kitchen while offering a full menu, or to serve diners from 6 ft. away. Reducing dine-in capacity means fewer tips for servers and higher overhead costs for the restaurants. As it is, breaking even in the restaurant business is hard.

Other restaurants decided to wait for a few weeks, and open for Mother’s Day weekend following the revised safety precautions. At Chennai Express and Masti, employees are wearing gloves and masks. There are hand sanitizers and napkins placed at every table, and plexiglass barriers between the staff and customers. More stringent health etiquettes are being enforced and staff temperatures are being monitored. No more than ten people are allowed per 500 sq. ft. of space and each family has to sit at least six feet apart. Party sizes are restricted to six people.

Even with all these measures in place, the biggest issue is that customers don’t feel comfortable going out. As long as there’s a health risk, the majority of people are not going to feel secure sitting at a restaurant, no matter how far apart the tables are.

Indian weddings take a big hit

Some Indian restaurants have another adversity to deal with as the majority of their business comes from catering. Even during the best of circumstances, restaurants have lean profit margins. Perumal emphasizes that most of his business comes from catering to weddings, parties, and large events. His two restaurants only work as the face of the company, attracting diners to learn about the South Indian vegetarian food he offers, before booking big orders.

“Starting March 9th, all my events started getting cancelled, including the 2020 Masters, weddings, music tours, festivals, parties, and corporate events,” says Becker. Walia’s Ashiana and Signature Ballroom, which are mainly event venues, have been closed since mid-March as well.

It is unlikely that big weddings, corporate gatherings, or social events will make a comeback any time this year. If at all, party sizes would be reduced and social distancing measures will cast an abnormal vibe. Walia mentioned that the Atlanta History Center (where he was scheduled to cater a wedding for 300 people) is now allowed to have 120 people in banquet style setting, with four people per table, to be served family-style. The staff would be required to wear gloves and masks, perhaps even the guests too. The iconic Indian weddings with their lavish buffets may become a thing of the past.

The future of dining out

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Irani is hopeful for the future. He thinks there’s only so much home cooking one can do. “Eating out is a big part of our culture, but people don’t eat out just because they want the food. They enjoy the experience of being in a restaurant, in the company of their friends, and getting pampered with good service,” he says. At some point, he feels, when people figure out that it’s safe for them to go out, they will go back to restaurants. They will return to places that comfort them, take care of them, and make them feel safe. He is committed to staying open as a take-out restaurant for as long as it takes, even if it is six months or a year from now.

Chai Pani restaurants are reopening a week at a time starting mid-May, offering takeout only. They have converted the dining room for preparing food and packing to-go orders. Except the staff, no one will be allowed inside the building. Orders have to be placed online and paid for contactless, either online or through a swipe pad located outside the restaurant, to avoid interaction. They have also marked parking spots with numbers, and spaced out pickup lines.

Becker will continue to offer take-home meals prepared in her catering kitchen, which is well spaced out, safe for employees, and well sanitized. “I don’t want to put my own family, my employees, and customers at risk by opening for dine-in,” she confirms, looking at a long-term business strategy that could last a few years. She doesn’t plan to reopen Bhojanic until there is testing, contact tracing, medicine, or immunization.

Issues with takeout and delivery

While takeout and delivery have become mainstream sources of income, they are not enough to sustain most restaurants. Ninety percent of people order food through third party companies, such as Uber Eats, Grub Hub, Postmates, or DoorDash. According to its website, Uber Eats charges restaurants a 30 percent fee for delivery and 15 percent fee per order for pick-up, unless a restaurant negotiates a different rate. “The margins are way too thin. We were spending 30-35 percent more in food cost, and not making any profits,” says Walia. He continues to stay open to support his staff, as the majority of them live paycheck to paycheck. Restaurants recommend customers order directly through the restaurant websites or by calling, so that businesses are able to keep more of their profits.

Perumal wants to keep his restaurants open for takeout but continues to struggle with managing the books. “Once I account for employee salaries, rent, utilities, food cost, third-party fees, etc., I can’t even make takeout profitable,” he says. He has hired only one employee per location to take phone orders, cook, pack, and serve. “It is the only way I can help the staff and the mall survive. But if there’s no business, I will close permanently,” he adds.

~ Written for and published by Khabar Magazine. All rights reserved.

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