Coupled with a year-over-year decline of seated U.S. diners, the social distancing measures in place to curb the spread of COVID-19 have proven devastating to the restaurant industry – a business sector that's already known to run on small profit margins.
While states and cities are slowly reopening, COVID-19 cases continue to increase nationwide. In an unprecedented move to control the spread of Coronavirus by banning gatherings at eateries and bars, restaurant managers shifted strategies to stay afloat. But apps like Uber Eats snatch 30 percent of total sales in an industry where profit margins are already spread thin.
“Small profit margins are a fact for all restaurants. You have to prepare in some way or another for rainy days. I'm a true believer in that. Being Greek, we've been brought up old-school,” said Grace Keros, owner of American Coney Island in Detroit.
Founded by Constantine `Gus' Keros in 1917, American Coney Island has been around for over a century, still family owned and operated today. And while Coronavirus hotspot Detroit saw restaurants shutting down overnight, Keros said she was busy selling the establishment's famous Coney Kits – a box that contains all ingredients necessary to enjoy the proprietary blend hotdogs American Coney Island is famous for, right at home. The box includes Coney Island steamer buns, a white onion, American Coney Island natural case franks, and chili sauce for topping.
“I was busy during coronavirus when everyone else was closed. I was shipping out Coney Kits and feeding front lines through programs in the city of Detroit. You do what you have to do to survive and keep going,” Keros said. “It's easier said than done.”
Keros said the downtown Detroit restaurant scene was already saturated with restaurants, and that she expects some of her peers will be forced to shut down for good. Restaurants indeed had the highest number of business closures in March compared to other industries. Of the businesses that closed as of June 2020, 17% were restaurants and 53% of those restaurant closures were indicated as permanent, according to a Yelp Local Economic Report updated June 25, that goes on to state that “restaurants run on thin margins and can sometimes take months or even years to break even, resulting in this higher rate of permanent closures.”
As of June 15, Yelp reported nearly 140,000 total business closures since March 1, as just 20% of the 175,000 closures in April had reopened. Las Vegas, where a second American Coney Island has opened, “endured the highest number of closures relative to the number of businesses in the city (1,921), while Los Angeles, had the largest total number of closures (11,774), the report noted.
As more restaurants fail, experts predict that some 30% of Detroit restaurants may close their kitchens permanently, but Keros assured us American Coney Island is here to stay and serve the family's secret recipe hotdogs for decades to come.
“As crazy and challenging as [the restaurant business is], I love it. I would not have it any other way. We Greeks have changed the way America eats,” Keros said.