A year ago, a Valentine’s Day snowstorm or the no-show of a dishwasher might have figured high on a restaurateur’s list of dreaded surprises. Then came the Mother of All Resets, a.k.a. the pandemic. Operators who once fretted about the freshness of their salad greens were losing sleep about far weightier matters than the threat of limp Romaine. The overnight suspension of an entire industry’s livelihood tends to foster recalibration of what constitutes a true business catastrophe.
The new year promises a shift back toward normalcy and better times. But low-odds possibilities could turn that journey into a barefoot march over broken glass, with several shovels of glowing coals tossed in for texture and color. Here are some of the what-if’s that could cut the lines dangling big hurts over operators’ heads.
Inoculation doesn’t take
About 15% of Americans say they’re averse to being vaccinated against COVID-19, according to a mid-December poll by ABC News and Ipsis. Health officials say that roughly 75% of the population needs to be inoculated to reach herd immunity or the point where coronavirus fades away because few new hosts can be successfully invaded. Mathematically, not a lot of leeway is left for chasing away the pathogen with hypodermics. Any development that scares people into the anti-vaccination camp could thwart the nation’s best hopes for taming the virus.
Fortunately, only four individuals have been known to have adverse reactions to the Pfizer treatment as of this writing, and that’s after hundreds of thousands received the first shot of the two-injection protocol. Scientists remain confident that the treatment is about 95% effective in fending off COVID, with the Moderna serum showing near-equal efficacy. And a parade of high-profile individuals have volunteered to publicly get a shot, hopefully allaying the fears of some Americans who are still undecided on whether to roll up their sleeves.
But even if the inoculation is effective, there’s a related danger…
The pandemic lasts longer than expected
Even if every man, woman and child queued up six feet apart tomorrow for one of the vaccines, the supply would be woefully inadequate to oblige them all. The question is when availability will catch up with demand. Speculation fueled by the Trump White House suggested June as the outward-most date. But authorities advising President-elect Biden say that timeframe may be optimistic.
Dr. David Kessler, a member of Biden’s COVID advisory group who’s often mentioned as a possible candidate for the top job at the Food and Drug Administration (FDA), has said that the third or fourth quarter of 2021 are more realistic possibilities for fully meeting the nation’s vaccine needs. Kessler, who headed the FDA under President George H.W. Bush, is not alone in warning that states will need more time than is universally hoped for the inoculation of 328 million Americans. Restaurant workers may get the shots before then, but customers may still be required to wear masks and socially distance for months to come. Yet to be determined is what safety measures will be required of restaurants as vaccinations become widespread but the situation falls short of herd immunity.
Deferred charges come due before restaurants can repay
When the industry was largely shut down in March and April, many restaurants successfully negotiated deferments in paying such major expenses as rent, franchise fees and debt service. It was not uncommon to set a due date on the IOUs of Jan. 1, or what seemed at the time like a far-forward date when establishments would certainly be back in full operation. Then came the fall surge in new coronavirus infections and another wave of dining-room service limitations. What seemed like balloon payments due well in the future were suddenly looming as near-term obligations that would be near-impossible to meet.
And that’s where many in the industry find themselves today. Will creditors be willing to delay the due dates on payments again—or, even better, forgive some of what they’re owed.
The industry may be about to find out.
Labor wants its payback
A huge part of the coalition that propelled Joe Biden to victory in November was organized labor. After the Democrat takes the presidential oath of office on Jan. 20, what kind of payback are unions and labor advocates going to demand in return?
Biden has already voiced support for raising the federal minimum wage and killing the federal tip credit. He’s also attributed the rise of America’s middle class to the unionization of the nation’s workers while pledging to help more blue-collar families make the climb to that next level. How pro-labor will his administration’s policies be, and what will the upshot be for the restaurant industry, the nation’s second-largest private-sector employer?
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.