Gramps owner Adam Gersten scanned the crowd at his popular Wynwood bar on Saturday night and did not like what he saw.
The problem wasn’t that there weren’t enough patrons. The problem was that there too many of them — boisterous, loud crowds of people drinking and laughing and seemingly oblivious, or at least unmindful, to the coronavirus epidemic.
“I was looking around and realizing people were still coming out and choosing not to distance themselves from each other,” Gersten said. “We’ve had confirmation of cases in Miami, but people still aren’t getting the message. I woke up Sunday morning and decided to shut it down because I don’t want to be a part of the problem.”
Gersten said he didn’t make the decision lightly, knowing it would leave his staff of 40 workers temporarily out of work.
“That goes for me too,” he said. “People tend to think business owners are sitting on piles of money like Scrooge McDuck, but I live paycheck to paycheck too. But the response has been overwhelmingly positive. I’ve had doctors from out of town reach out to say we’re doing the right thing.”
Although the bar is closed for now, Gersten is keeping Gramps’ popular Pizza Tropical ventanita open, so diners can grab a slice or a pie using curbside pickup. Restaurants around Miami-Dade are adapting similar strategies, rethinking their traditional habits in order to survive the economic downturn that has already started to batter South Florida’s vibrant food and beverage businesses.
Monday night, Miami Mayor Francis Suarez told the Miami Herald that the city plans to close restaurant dining rooms and bars, only permitting takeout, drive-through, drive-in and delivery to occur. Miami Beach and Miami-Dade County planned to make a similar announcement on Tuesday.
“It will be modeled after Dallas and Los Angeles,” Suarez said in a video call. The mayor, who tested positive for COVID-19 on Friday, has felt mild symptoms while quarantined in his home.
The damage wreaked on the restaurant industry could be catastrophic.
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A disaster in the making
Paul Barron, CEO of Foodable Labs, a data company specializing in restaurants and hospitality, said he projects 28,000 restaurants across the U.S. will close by March 30 because of the epidemic. If the coronavirus outbreak is not contained, that number will grow to 56,200 by April 20 and 80,000 by May 25.
“The overall effect to the state of Florida, along with the cruise lines and the tourism, could be devastating,” he said. “It’s a black swan event. I’ve never seen anything like this. I lived through the economic crisis of 2008, when the restaurant industry was decimated, and I think this is going to be worse.”
According to the National Restaurant Association, an industry group, there are 41,366 eating and drinking establishments in Florida that generate 1,096,000 jobs, or 12 percent of the state’s total employment. In 2018, Florida restaurants generated $50.1 billion in sales.
But Barron said that using a forecast model which tracks consumer sentiment, government actions, social limiting and quarantines, he foresees a precipitous drop in restaurant revenues throughout the country. As of Jan. 31, restaurants were generating $5.1 billion per week.
“By March 30, we forecast a drop of $2.9 billion in weekly sales,” he said. “By April 20, weekly sales will drop $4.1 billion. You get a rebound by May 25 — providing there is no nationwide quarantine or lockdown — with a weekly sales drop of $2.7 billion.”
Overall, Barron predicts the restaurant industry will suffer a $45 billion drop year-over-year by June 1 — a 55 percent decrease from the same period in 2019.
Harder to calculate: The personal toll on those million-plus Florida residents who work at bars and restaurants, many of whom rely on tips to make their living. According to Florida law, employers are only required to pay tipped employees roughly half of the minimum wage, or somewhere between $4-$5 an hour.
But for people like Alex “Machi” Machado, who has worked as a bartender at Gramps for seven years, his hourly wage is the least of his concerns.
“I don’t even pay attention to my paycheck,” said Machado, 38. “That’s not going to do anything for me. I don’t know what the government has in place for people in the industry where 90 percent of our income is tips. If I’m used to making $4,000 a month, and that suddenly gets cut to $1,000, I don’t know how my bills are going to get paid. I’m a little freaked out.”
Many restaurant owners who have seen a steep decline in foot traffic have already thought of new ways to serve their clientele and protect the jobs of their staff. Chef Klime Kovaceski, who owns and operates the popular Italian restaurant Crust with his wife, Anita, said he normally had to turn away 40 to 50 people every weekend because his 70-seat dining room was always packed.
Last weekend, though, he was able to seat everyone who showed up, because the turnout was a lot lower. But he made up the decrease in dine-in restaurant sales with takeout orders, which usually make up 20 percent of his total revenue.
“Now takeout is 40 percent of my total business,” he said. “I have a staff of 20 people and I haven’t laid off a single one because if someone is working as a server and the restaurant is slow, I can move them over to the packaging and delivery portion of the restaurant. Most like the entire kitchen staff will be able to stay on payroll. I just hired two new cooks last week.”
Ani Meinhold, co-founder of the Vietnamese eatery Phuc Yea, said the restaurant has seen a 60 percent drop in overall business, but she has kept her doors open by creating a new menu that’s easier to execute, scaled-back inventory, added curbside pickup and delivery options and lowered the capacity of in-room dining seating.
“We haven’t closed because putting 40 people and their families out of business is a tough call to make,” said Meinhold, who is pitching in and handing out curbside pickups herself. “If we close our doors, we lose all the money. If we do the numbers correctly, we lose less. This is apocalypse now.”
Like many small business owners, Meinhold said that the government needs to have a plan in place to help restaurants and bars regain their footing after the coronavirus has gone the way of Zika.
“They have to have programs in place where employees can seek assistance,” she said. “This is one of the few industries where our employees live check to check or employ people with limited education and criminal backgrounds. We’re definitely going to need a program to help these people sustain their lives if things get worse. Because when you run out of food and money and you become desperate, you do whatever it takes to feed your family.”
Even restaurant workers who are struggling to keep their jobs are now facing a new hurdle: a countywide rule issued March 15 that forces bars, restaurants and nightclubs to shutter their doors by 11 p.m.
Danii Sanchez, 37, who works as a bartender at Las Rosas Bar in Allapattah, said it’s been “scary” watching the crowds at the popular neighborhood bar grow thinner by the day.
“Today our general manager told us there’s a curfew and we have to close by 10:30 p.m.,” she said. “We’ve always been open from 3 p.m. to 5 a.m. Every time one of these announcements comes out, it kills more of our business. You are working but there’s no money coming in. We are a community bar, but even regulars haven’t been coming in. Saturday was the worst day, even though we had [live entertainment] programming. No one came out.”
Even restaurant workers who lived through the Zika scare in 2016 say they are much more worried about the current outbreak.
“Those of us who have done this for a while were smart enough to set some money aside, because the season was coming to an end,” said Jacob Hardy, 37, who works as a server at Beaker & Gray and managed the Wynwood Diner during the summer of Zika. “But this past Friday night, we did 25 percent less business in [sales] than a normal Friday. Saturday it dropped a little more.
“The Zika scare was way worse,” Hardy said. “Wynwood came to a screeching halt during that time. The only guests we had in the Wynwood Diner were reporters setting up shop. But Zika was pretty quick. The thing I’m most worried about right now is the coronavirus might have more longevity. We just hope people don’t let the scare of it linger.”