How LA's Restaurant Industry Is Trying To Save Itself — And What You Can Do To Help
With all Californians ordered to shelter in place in an effort to stop the spread of COVID-19, every restaurant that hasn't shut down has become a takeout/delivery business.
This isn't a sustainable model, and for restaurants and bars, the stakes are dire.
More than 800,000 people in Los Angeles and Orange counties area work in hospitality, 12.7% of our total workforce. Nationwide, that number climbs to approximately 15 million people, making the hospitality industry the fifth largest in the United States.
Restaurant jobs are hard, and this was true long before coronavirus. Employees often work long hours, on their feet. They rarely receive paid sick leave or employer-sponsored health care. Throw in layoffs and slashed hours, and the National Restaurant Association estimates the industry will lose five to seven million employees and $225 billion — in just the next three months.
Many restaurateurs live on microscopically thin margins, and most restaurants won't survive this pandemic. That's the grim truth. The less the government intervenes to help the hospitality industry, the more devastating the outcome.
"When the government says, 'Switch to delivery and take-out,' what they don't understand is that for restaurants like us, that is less than 1/15th of our business," says Kristine Lefebvre, co-owner of Trois Mec and Petit Trois. Trois Mec, with its multi-course tasting menu, isn't the kind of place that was meant for takeout while Petit Trois ended its to-go food service on March 21.
As is often the case, the people most affected by what's going on are the people at the base of the restaurant industry pyramid — undocumented workers, who are often afraid to seek care and aren't eligible to receive those potential $1,000 government payments.
The federal government is currently working on a $2 trillion stimulus package that will fund unemployment insurance, provide rescue money for businesses and pay for health care but it's unclear how much of that money will go to the hospitality industry — or when such legislation will be passed.
Without immediate, organized relief, the hospitality community is pulling together to save its industry and help its workers. Here's what they're doing and how you can help.
If you have the means, order delivery or takeout from your neighborhood restaurant. Order directly from the establishment (you can even have booze accompany your food, now) and pick up your food so all of your money goes directly to the business instead of the delivery app, which can take up to a 30% cut. If you use a delivery app, pick one that has waived or decreased fees, like DoorDash and Caviar, instead of simply deferring them, like GrubHub. You can use RestaurantHeroLA.com to find restaurants still serving delivery and takeout.
Want booze? Recently launched Cellars.LA aggregates restaurants trying to unload their beverage inventory.
If you can afford it, here's another way to help. Estimate how much money you would have spent dining out in a typical month and donate some of that to relief funds.
We know this is only the tip of the iceberg and we'll keep adding resources to this list.
Immediate Relief For Workers
The LEE Initiative, sponsored by Maker's Mark, allows restaurant workers who have been laid off or seen a significant reduction in their hours to pick up two free meals and provisions like toilet paper and diapers on a nightly basis.
UPDATE: The Los Angeles relief center is moving from Chi Spacca to a space two doors down from Sqirl in Virgil Village. Thanks to financial support from Busy Philipps and Marc Silverstein as well as Onda/Sqirl chef Jessica Koslow, beginning Saturday, April 4, laid-off restaurant workers or those who have had their hours significantly reduced may pick up a meal and supplies from 4 to 7 p.m. daily. More details here.
The Restaurant Strong Fund was started by Samuel Adams and the Greg Hill Foundation to support people who have been employeed full-time (30+ hours/week) for at least three months at the same restaurant, bar, cafe or nightclub. The fund has just been expanded beyond its Boston roots, kickstarted with $2 million by Samuel Adams an functions in 20 states, including California. Eligible workers can apply here.
A Hub For Grub
Betty Fraser and Denise DeCarlo, of recently shuttered Grub in Hollywood, are offering a rotating menu of delicious, freezable meals for $10 each to hospitality workers and others affected by the economy. You need to give them 48-hour notice by emailing email@example.com, then you come pick up your eats at 6248 Santa Monica Blvd.
The National Restaurant Association Educational Foundation, backed by the star power of Guy Fieri, has a restaurant employee relief fund. They plan to announce new guidelines for it on Wednesday, April 8 and re-open applications for it on Friday, April 10. Each grant is worth $500 and goes to those who have worked part- or full-time in the industry for at least 90 days in the past year. To apple, click here.
Bonded In Struggle
Inspired by the war bonds sold during WWII, a pair of NY-based PR veterans has launched the Dining Bonds Initiative. You buy a virtual gift certificate to participating restaurants and bars (there are about two dozen to choose from in Southern California, including the heavily themed venues of the 1933 Group) for 75% of their total face value, and you redeem them at a later date, typically 30 to 60 days later. So if you buy a $75 dining bond now to, say V DTLA, when you come in to spend it, assuming the restaurant and the rest of us are still standing, you'll have $100 of credit.
Paying It Forward
inKind Plus is a group of independent restaurants issuing gift cards (for $100, $500 or $1000) that come with a spending bonus (i.e. when you cash them in, you'll have $110, $600 or $1300 of credit). On the back end, 50% of funds are disbursed to businesses immediately and when the gift card is redeemed, they get an additional $0.33 for each dollar spent.
L.A.-based restaurateurs have banded together to form One More Helping, with participating restaurants donating $1 of every gift card sale to a cause of their choice, such as No Kid Hungry, Meals on Wheels and the L.A. Regional Food Bank. This lets would-be diners support their favorite restaurant while contributing to various non-profits during an unprecedented time of need.
Drinking Together Alone
At the micro level, industry professionals are bringing the bar experience into your home. New Yorkers Jackie Summers, the creator of Sorel Liqueur, and his pal, Daniella Veras, are hosting virtual happy hours. Some of these are sponsored by liquor brands with the tips benefitting that session's featured bartender. Accompanying the bartender or sommelier, you might see a doctor taking questions about COVID-19 or a fitness instructor offering tips for home workouts.
Tips For Drinks
In its #atipforatip initiative, L.A.-based beverage consulting firm Cocktail Academy is featuring a cocktail recipe per post on its Instagram feed. Like what you see? Click the link to tip the bartender who created that drink.
To bridge the huge gaps in our social safety net, various organizations have set up relief funds.
- The Restaurant Workers' Community Foundation has started a COVID-19 crisis relief fund. When you donate, 50% of the funds go directly to individual workers. The balance goes to non-profit organizations serving restaurant workers in crisis and as zero-interest loans to restaurants trying to get back up and running.
- CORE, which stands for Children of Restaurant Employees, is giving money to parents or parents with live-in relatives who have been diagnosed with COVID-19.
- The United States Bartender's Guild has set up an emergency assistance program for philanthropic grants to bartenders, spouses and children of bartenders.
- Advocacy group One Fair Wage has set up a fund to provide cash assistance to tipped and service workers whose incomes have been affected by the current crisis.
- The James Beard Foundation launched a relief fund that will provide micro-grants to independent food and beverage businesses so they can stay afloat.
- For single-parent households affected by a job loss in the food and beverage industry, the LA County COVID-19 Emergency Relief Fund, funded by the Holdsworth Group, is now giving away $250 Kroger gift card (good at Ralph's and Food 4 Less). Fill out an application here.
Pushing For A Government Bailout
Around the country, coalitions of independent restaurant owners, chefs and hospitality professionals are banding together to ask local, state and federal governments for aid. Here, in Los Angeles, that has materialized in the recently formed Southern California Hospitality Coalition. Led by Ann Hsing, COO of Santa Monica restaurants Pasjoli and Dialogue, the group got started with a conference call on Tuesday, March 21. (So many people wanted to attend, the call service they were using, which has capacity for 1,000 people, overloaded and shut down.)
"We needed a clear, concise message that everyone could get behind," Hsing says. "We're estimating that 80 to 85% of restaurants are going to be facing the same thing. Bottom line: Pasjoli won't survive without government assistance."
The main takeaway from the call was that deferring payments — rent, utilities, taxes — isn't enough. Nor are tax rebates, which happen in April 2021; action is needed now. The lack of cash coming in means time has essentially stood still, and that revenues cannot be recouped.
"All the solutions being offered by the government (staying evictions from commercial properties, keeping banks from charging late fees and interest for now, and SBA loans) are going to hit us harder when we're trying to claw our way out of the grave once we can go back to regular operations," says Ting Su, co-founder of Eagle Rock Brewery and Eagle Rock Public House.
Then there's the uncertainty. The longer "Safer at Home" measures go on, the worse it's going to be for businesses.
The coalition wants California governor Gavin Newsom to adopt the following measure:
- Waiving rent and mortgage payments through incentives to restaurants and their landlords, respectively
- Forgiving sales tax in Q1, Q2 and, if necessary, Q3, by the California Department of Revenue
- Forgiving payroll taxes for those that can still pay employees.
- Tax credits to those who continue to pay for their employees' health insurance during the pandemic
- Temporarily suspending city and municipal fees
- Waiving credit card processing fees, which amount to 3 - 4% of of every sale, in Q2
- Paying unemployment wages at 100% and averaged over the last two quarters instead of, as California currently does, the last four because this arrives at a more accurate figure
- Forgiving employers' unemployment insurance rate increases
- Institute a tip credit for tipped employees so they unemployment checks are paid beyond minimum wage in unemployment
What You Can Do
Patrons of the restaurant industry — aka all of us — can get involved.
Contact your representative and ask them to help the hospitality industry. Use this contact form provided by the National Restaurant Association. When you do, consider using a script for your calls or a service like Resistbot (by texting the script to 504-09) to direct your letter to the right representative.
The James Beard Foundation released an advocacy toolkit tailored to helping the industry in all states. It contains statistics and other resources that might be useful when contacting your congresspeople and state officials. It also has details about where to apply for aid.