The Alinea Group provided a sobering look Saturday at the plight of independent restaurants amid the quickly spreading coronavirus, revealing that, at some point soon, “it will likely not make sense to remain open.”
The message posted on Medium from the parent group of Alinea, one of the country’s foremost fine-dining establishments, paints a somber picture for the industry at large.
“Extrapolating our small business across the hospitality industry and the broader U.S. and world economy is indeed quite sobering,” wrote Nick Kokonas, co-owner along with chef Grant Achatz of Chicago-based Alinea, Next, The Aviary and Roister.
Further illustrating the tremendous impact the coronavirus is having on the industry, David Chang-founded Momofuku Group announced Saturday night that it would close all of its restaurants in New York, Washington, D.C., and Los Angeles "until further notice."
Kokonas shared a graph of The Alinea Group's cancellations by date, starting with a trickle and ending this week with 186 cancellations.
“As you can see, the rate of cancellations is increasing with the crisis,” he wrote. “At some point fairly soon, it will likely not make sense to remain open, even if it is safe to do so.”
In a note on its website, Momofuku leadership called the decision to close "the most difficult moment in Momofuku's history," saying the severity of the COVID-19 outbreak has put "our business and community in completely unchartered territory."
All of Momofuku's salaried employees will take pay reductions and all hourly employees will be paid through this Friday. Hourly employees who've been with the company five years or more will be paid through April 1. And all hourly employees currently enrolled in health insurance will maintain access until April 30.
"We are making hard decisions across the company to ensure that once we get through this crisis, there is a Momofuku to return to," the note said. "The road ahead is difficult and uncertain, but we will do everything we can to ensure the future of Momofuku and everyone who makes this company what it is."
If The Alinea Group decides to close its restaurants, or if it is required by the government to do so, Kokonas said they will “mothball” the business by furloughing 95% of its employees while keeping their healthcare benefits intact.
The company’s ownership has already eliminated their salaries.
Among other cost-cutting efforts, Kokonas said the company has eliminated overtime hours wherever possible, reduced salaried wages by 35%, moved managers into working stations and serving, requested rent abatement from landlords and planned to use and downsize its existing dry goods and liquor.
“Additionally, we are considering creative options to stay ‘open’ through pickup, delivery, and perhaps unique ‘in-house’ experiences,” he wrote.
Restaurants around the country are facing unprecedented struggles as consumers are urged to stay home to prevent the spread of COVID-19. In Seattle, the first major city hit by the coronavirus, many have already closed, either permanently or temporarily. Restaurateur Danny Meyer on Friday announced the temporary closure of all of his Union Square Hospitality Group concepts in New York City. And on Saturday, Time Out Market Chicago—a 50,000-square-foot food hall that opened in November—announced its temporary shutter.
“So for now, we will keep doing that as long as is possible,” Kokonas wrote of staying in business. “And then, on the other side of this, we’re going to crack open a treasured bottle of wine and reinvent once again. That’s what we love doing.”
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