MA Coronavirus: Takeout Business 'Unsustainable' For Restaurants
BOSTON — As Massachusetts lawmakers consider a bill to help the state's struggling restaurants get through the coronavirus business slowdown, the Massachusetts Restaurant Association said it's "unsustainable" for those businesses to continue only offering takeout and delivery.
"Under normal circumstances, take-out and delivery account for less than 20% of sales at most restaurants and [for] those operations with no history of take out, it is hard to build a platform from scratch," said Stephen Clark, vice president of government affairs for the Massachusetts Restaurant Association. "The problem is restaurants have no opportunity to build the check average but it takes similar level of staff for a fraction of the revenue, which is an unsustainable business model."
Clark said he was disappointed the state legislature has yet to pass a bill allowing restaurants to sell beer and wine with takeout orders. He said the association's members are trying to find the right formula of hours and staffing to justify staying open, and adding beer and wine sales would help.
On Tuesday, Gov. Charlie Baker extended the order for all nonessential businesses to remain closed and for restaurants to only offer takeout and delivery until May 4. That was bad news for Peter Ahn, who owns BonChon in Salem. Ahn said he has seen an increase in takeout and delivery sales, but he has had to cut workers' hours.
"Once the pandemic subsides and we are able to open our doors to the public, it will still take a while to recover from this," Ahn said. "Will it take three, six or nine months to bounce back from this? Who knows, but it will be a difficult road back to recovery."
Meanwhile, state Sen. Jamie Eldridge introduced legislation this week that would require insurance companies to cover restaurant business losses during the current state of emergency, which Gov. Charlie Baker declared March 10.
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Most insurers write policies preventing claims for lost business due to a virus, or when there has not been physical damage to the property. Renowned chef Thomas Keller has already sued his insurance company for not covering revenue losses at his two restaurants in Napa Valley.
"Along with other businesses, the restaurant industry needs help from the government and we need it fast," Ahn said. "At the end of the day the restaurant industry cannot survive or operate without have a great front of house and back of house, because without them the restaurant is nothing.
Clark said the Massachusetts bill, which is currently seeking co-sponsors, is a good first step. But ultimately, he thinks the federal government will need to step in.
"If restaurants can get their business interruption insurance policies paid, it would go along away to alleviate the problems, and it is good to see the state filing this important legislation," Clark said. "Ultimately, I think we are going to need a Federal re-insurance bill. We know that insurance companies have money, but they don't have unlimited funds, this virus clause is impacting claims across the country. Hopefully, the feds see the states trying to tackle this issue and spurs them to take action."
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Dave Copeland writes for Massachusetts Patch and can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).
This article originally appeared on the Peabody Patch
