New cases of COVID-19 have been decreasing in Texas since about mid-January 2021. Starting March 10, 2021, all businesses, including food service businesses, may return to 100% capacity.
But mixed with the good news are continuing challenges. County judges may restore restrictions on food service businesses anytime the COVID-19 hospitalization rate within a hospital region exceeds 15% for seven days straight. County-imposed restrictions could lower the occupancy limit for businesses to as much as 50%.
Even after hospitalization rates level out, the effects of the pandemic on the food service industry will be felt for years to come.
Impacts of COVID-19 on Texas’ food service industry
Food service businesses across Texas were hit hard by COVID-19 safety restrictions, including forced closure periods and capacity limits that led to decreased revenue. With decreased revenue came hard decisions about whether to lay off employees to cut costs.
Arguably the first big shock to the industry came on March 6, 2020, when Austin city officials canceled South by Southwest. SXSW is a massive film, music, and interactive media festival that brought an estimated $356 million to Austin in 2019. More than 400,000 people were expected to attend the festival in 2020, according to the Texas Observer.
The first statewide closure affecting restaurants and bars soon followed on March 19, when Governor Abbott closed dine-in areas. Restaurant dining rooms were allowed to reopen on May 1 and bars reopened on May 22, both at limited capacity. Over the next five months, managers had to deal with changing occupancy restrictions. Bars were also hit with a second statewide dine-in closure that lasted from June 26 to October 7.
Statistics from a variety of sources paint a grim picture of how the restrictions affected, and continue to affect, food service businesses:
- In March 2020, 60% of respondents to a nationwide survey said they didn’t have enough operating capital to weather a one-month closure and weren’t certain if takeout and delivery orders would bring in enough revenue to sustain them
- By late April 2020, 41% percent of Texas restaurant owners had temporarily closed one or more of their restaurants; 19% had permanently closed one or more locations; and 700,000 restaurant employees had lost their jobs
- Over the course of the pandemic, 640 Texas bars have re-classified as restaurants, while 659 bars never reopened after the first statewide closure in March 2020
- February 2021 data from the Bureau of Labor Statistics indicate that jobs in the hospitality industry, including food service, continue to suffer across the United States
Pivoting to meet restriction challenges
Although it’s not easy, Texas businesses are working hard to adapt to the constant, ongoing challenges posed by COVID-19.
For example, when dine-in was first reopened for restaurants last May, many decided not to do so. For those businesses, running a dining room at less than full capacity wouldn’t be profitable. So they kept their focus on takeout and delivery instead.
Bufalina, a pizzeria in Austin, was one of the restaurants that chose to focus on takeout orders instead of trying to resume dine-in. Before the pandemic, Bufalina had two fully operational restaurants. During the pandemic, however, it found that switching to a takeout-only model allowed it to better control demand. It was also easier for its smaller team of food handlers to follow social distancing guidelines.
“It also means we’re selling less food than we could sell if we brought in more hands, but our current approach prioritizes safety while bringing in some revenue, which hopefully means we’ll be able to stay in business,” owner Steven Dilley told the Texas Observer in July 2020.
In addition to switching its focus to takeout, Bufalina also started a new service — retail wine sales.
Other restaurants changed their business models as well, including Dish Society in Houston. Pre-COVID, Dish Society was a fine-dining restaurant that specialized in serving locally-sourced food. To help offset the financial hit of dine-in restrictions, it began selling grocery items like flour, eggs, and even toilet paper.
Some restaurants also began selling family meals and take-and-bake meal kits. Full-service restaurants started offering hamburgers and pizza for takeout. A barbecue food truck in Austin named LeRoy & Lewis changed its business model to a drive-through.
Gradually, as dine-in restrictions have loosened and more information about COVID-19 has become available, restaurants like Dish Society were able to resume in-person dining in a limited capacity.
In September 2020, Bufalina was also able to resume some in-person dining when it temporarily converted some of its parking space into patio dining. The conversion was made possible by an Austin city ordinance aimed at helping food, beverage, and retail businesses.
Takeaways for the future
Although the new COVID-19 vaccines seem to be having a positive impact on new case counts, it’s still uncertain how the pandemic will affect food service businesses long-term.
For some, business may never be the same, thanks to significant changes in their operating models. In August 2020, economists predicted that up to 30% of Texas restaurants would either close or significantly change their business models. It’s hard to say at this point if those changes will be temporary or permanent.
Regardless of whether your business model will see a permanent change, it could take years to build back up to where you were financially before the pandemic. Be patient, take each new day as it comes, and celebrate your small victories.
Another common question is how long COVID-19 policies will stay, and even if some will become permanent parts of the industry.
Again, it’s difficult to predict which changes will become the “new normal” and which will gradually fade away. For instance, will restaurants and bars ever be able to include the same number of tables and chairs, or will all future dining rooms be more spaced out?
These are questions that experts are currently trying to answer. A recent article in Forbes Magazine, “What Will Restaurants Look Like After Covid?”, shares its opinion on what changes are here to stay:
- Increased transparency about cleaning procedures, which helps customers feel more comfortable visiting your establishment
- More digital ordering options, which have proven so convenient for customers ordering food during the pandemic — some businesses might even switch to digital menus for dine-in customers
- Changed menus — supply chain issues have forced many businesses to re-evaluate their menu options, and you might decide to make some of those changes permanent
- Increased takeout and delivery orders, another option that has been so convenient for customers
- More space between tables, chairs, and open seating in indoor dining rooms and bars
- More outdoor seating options for diners
Of course, no one knows exactly what the future holds for food service businesses. The best thing you can do as a restaurant or bar owner is to try to stay flexible in how you do business. Watch what your competitors do and pay attention to your customers’ behavior. Both of these things can help you identify changes that may need to be made.
Like Bufalina, you might find it helpful to streamline your business a little. Consider narrowing your focus to one or two sales channels, like takeout and delivery, or simplifying your menu to just the most popular items. As you find what works best for you, you can gradually add new dishes or services.
Through it all, we’re here to support you. StateFoodSafety specializes in helping businesses navigate the food safety regulatory requirements in their area, including helping you train your team.
Learn more in our article, “How We Help Companies with Food Safety Compliance.”
— Jessica Pettit
Editor’s Note: This article was originally published on February 24, 2021. It was updated on March 4, 2021.
