- Restrictions in New York City have forced restaurants to change their business models overnight.
- The owner of the iconic Katz's Deli said he doesn't know how long his company can keep going without laying off staff.
- Meanwhile, owners of higher-end restaurants fear they will struggle to adapt to delivery and takeout-only systems.
- A stimulus package signed by the president offers $350 billion for small business loans, but questions still remain over when businesses will get their money, and if there will be enough to go around.
- View more episodes of Business Insider Today on Facebook.
New York City boasts one of the most diverse restaurant scenes in the world. But the coronavirus outbreak may change it forever.
Restaurants across the city, including legendary staples of the city's vaunted food scene, have temporarily closed their doors as business owners adapt to their new reality.
The iconic Katz's Delicatessen in New York's Lower East Side usually sees thousands of customers per day. Now, it's relying on delivery instead - and selling more products that can be stored for longer periods.
"So not just focusing on a dining experience or a restaurant experience, which I've spent so much time thinking about. But thinking about now your in-home experience and what can we do to help with that experience," Katz's fifth-generation owner Jake Dell told Business Insider Today.
Katz's employs close to 200 people - and for now, it hasn't done any layoffs. But the restaurant doesn't know how long it can keep going without making more changes.
"I mean, there's no question it's hard. And the hardest part is actually for the staff, these guys are family," Dell said. "We've certainly had to trim back days and hours, but as long as everyone can get something. We're figuring it out together."
"We've been here 132 years, so we're used to the unexpected in some ways, but you can never really fully prepare.
Not every restaurant owner has had the same fortune. A survey by the National Restaurant Association found that seven in 10 restaurant operators have had to lay off employees due to the virus, with nearly 50% anticipating further cuts to staff and hours worked in the coming weeks.
Joe Carroll owns five restaurants and bars, three of which are in Brooklyn. He had to let most of his staff go.
"I had to let about 83 people or something like that go. So that was brutal in many ways, you know. Especially when we're not doing poorly. The businesses weren't failing there, you know, nothing was closing. So it's a very odd thing to wrap your head around," said Joe.
Carroll's restaurant Fette Sau has been serving Southern-style barbecue in Brooklyn's Williamsburg neighborhood for 16 years. So far, delivery and takeout orders have been consistent enough to keep the restaurant afloat.
But he is concerned that higher-end restaurants, like his steakhouse St. Anselm across the street, may struggle to adapt to the new status quo.
"First of all, it's not the type of food that delivers well, plus we've never been set up for delivery. So there's been, you know, just a struggle in the last week trying to get on apps like Seamless and Caviar, because every other restaurant in the city that wasn't set up for delivery is trying to do that too. So they must be overwhelmed," Carroll said.
Last month, the president signed a $2 trillion stimulus package that includes $350 billion to fund small business loans to companies with less than 500 employees - like Carroll's business.
As of April 13, over $226 billion of the fund had been allocated to small businesses across the country, but early glitches in the system are making it difficult for lenders to process and disburse the loan payments.
Bars and restaurants already run on razor-thin margins, with many barely breaking even. Under normal market conditions, 60% of restaurants don't make it past the first year of operation, and 80% fail within five years.
With no clear timeline, the survival of many small businesses across the country has been thrown into jeopardy.
"I mean, it's one thing when one restaurant or a neighborhood perhaps suffers some major loss and everyone comes together to help them out. This is universal. This is countrywide basically, right?" Carroll said.
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