By Lenny Strauss
Hometown Weekly Reporter
The COVID-19 pandemic brought forth a slew of challenges that pushed industries across the United States to the brink, particularly the restaurant industry. At its height in 2020, restaurants struggled with the ability to operate normally due to the lack of customers, stemming from lockdowns and other health-related restrictions. Restaurants were forced to scramble to adapt to a new reality, as COVID-19 brought the entire industry to its knees. The pandemic triggered a wave of closures that while it impacted all sectors of society, hit restaurants the hardest. Shutdowns, capacity constraints, and safety concerns left many restaurants unable to survive financially. By the end of 2020, more than 110,000 restaurants had closed permanently or long-term in the United States alone, according to the National Restaurant Association. Closures are more than the shuttering of a business. As a result, many owners, chefs, servers and all restaurant staff lost their entire livelihoods en masse.
Restaurants largely rely on the local population and tourism. But during the pandemic, the former had limited access to restaurants and declining numbers, and the latter essentially disappeared. Strategically, many shifted to takeout and delivery measures, and those that were able to serve in-person made the most of their space to adhere to social distancing rules. It wasn’t about succeeding in this new environment; it was about survival. In a post-Covid landscape, the restaurants that remained have been forced to adapt quickly, especially to address their consumer base. Data collected from about 100 Massachusetts restaurants found that 66% of full-service operators say their customer traffic was lower than the previous year, and only 20% think sales will be higher in 2025. High inflation is one area that impacts consumer decisions, particularly when dining out. With increased prices, consumers closely monitor spending habits and may choose to dine out less as a response to these increases. A recent interview with Jessica Moore, Director of Government Affairs at the Massachusetts Restaurant Association (MRA) aimed to address some of these issues, including her perspective on current challenges, and future of the industry going into 2025 and beyond.
LS: What are some of the ways in which restaurants had to evolve to address the needs of consumers post COVID?
JM: “The emergence of outdoor dining was one of, if not the only silver lining of the pandemic. Communities reimagined public spaces. Restaurant owners/municipalities were able to invest a significant number of monies to make dining widely available. It’s great that a lot of restaurants have continued this.”
Apart from the obvious challenges to restaurants that have remained since COVID-19, Moore highlights another significant issue: credit card surcharges. Essentially, they are an additional charge imposed on the use of credit cards in lieu of a cash transaction. Massachusetts is one of two remaining states in the U.S. where it is illegal for a business owner to pass a credit card surcharge onto a consumer and instead allow businesses to offer a discount for the use of cash instead.
Why does it matter?
JM: “For restaurant owners, it’s difficult to do a cash discount. [During the Pandemic] folks were pushed to use plastic, instead of cash. The industry went from 60 percent credit card usage to over 90 percent. With a credit card transaction, an owner pays the fee, not just for the goods served, but also on the tip, as well as the tax. A small independent restaurant pays nearly $50,000 a year in credit card fees. We are working on this; owners [repeatedly] want some continuity with the law. Businesses should be able to pass on the fee; it is already allowed in 48 states.”
LS: Many local restaurants struggle with a dwindled consumer base - are there some that you think do better, how and why?
JM: Restaurant owners are some of the smartest, most innovative folks on the planet. They [along with] the folks that work in restaurants are super smart and adaptable. Over 90 percent of restaurants in our state are small businesses that are independently owned. Massachusetts has some of the best restaurants in the world, and they all continue to adapt to an ever-changing industry.
What can we do as locals? Support local businesses.
JM: “Go out, enjoy yourself, enjoy a nice meal, and remember everyone there is working hard to make sure you are having a nice time out once in a while.”
Look out for upcoming issues, where we shine the spotlight on some of our favorite local restaurants! We’ll cover their history, what’s new, and most importantly, what’s cooking!
