NYC Restaurants Struggle To Make Profit During Phase 2 Of Reopening
NEW YORK (WCBS 880) — Restaurants typically operate on thin profit margins, but establishments are getting squeezed as they struggle to serve their communities eager to eat out in phase two of New York City’s reopening.
“You need approximately somewhere between 70-75 percent capacity in order to make a small profit,” said Melba Wilson the owner of the eponymous Harlem restaurant and president of the NYC Hospitality Alliance.
Wilson told Joe Connolly and Neil A. Carousso on the WCBS Small Business Spotlight, sponsored by BNB Bank, that the industry is excited to usher in phase two this week with outdoor dining permitted curbside and on the streets on nights and weekends. But, many restaurants failed to pivot during the peak of the pandemic to food delivery and that element is key for establishments to turn a profit.
“I, personally, at Melba’s was open 14 years before I decided to do take-out and I thought take-out was just bringing another body in the restaurant in order to handle the calls and it’s an entirely separate operation,” Wilson explained, adding, “Unless it’s something that you were doing previously, I find that a lot of my counterparts found it very difficult to pivot.”
She said it’s “very grim and very difficult” for the industry as a whole, but restaurateurs should get creative in marketing their establishments, knowing that their communities want to support local businesses.
“We’ve been cross-promoting and supporting so many other businesses in the community to make sure that our community thrives and that we stay alive,” Wilson said.
Among her creative marketing initiatives at Melba’s Restaurant are T-shirts, promoting and selling her cookbook and urging customers to buy gift cards at a discount. She also told WCBS 880 owners should advertise take-out and delivery to those passing by and people prevented from eating at restaurants outside due to statewide capacity limits.
Wilson laments that many landlords have not given breaks on rent payments to local restaurants and that will drive smaller eateries out of business.
“Most of us still have to pay rent, we have to pay Con-Ed bill, we have to pay insurance,” she said of industry-wide fixed costs. “Opening for outdoor seating right now is important and will allow us to have more guests that are going to come in, order take-out, but then they have a place to socialize, to sit outside in a safe environment.”
Hear how restaurants are reinventing themselves to recover on the WCBS Small Business Spotlight Podcast on the RADIO.COM app or the media player above.