As the COVID-19 lockdown continues to cripple the economy, the fast-food chain Steak n’ Shake has announced it will permanently close 10% of its locations as a result of the pandemic. The announcement comes after the popular buffet chain Souplantation announced it will be closing all of its locations permanently.
According to Fox News, Steak n’ Shake parent company Bilgari Holdings announced the closures in its latest earnings report. Fifty-one company-owned, as well as 6 franchisee-owned locations, were closed in the first quarter of 2020. The company, which operates 610 restaurants globally, did not specify which locations would be shutting down.
“The COVID-19 pandemic had an adverse effect on our restaurant operations, thereby resulting in the evaluation of company-operated restaurants for recoverability,” the report said.
The announcement comes shortly after the company offered free fries to customers as part of the “We’re All Essential” initiative. “In such challenging times, we would like to do our part for our communities by giving out free fries to all,” said Sardar Biglari, CEO of Steak ‘n Shake.
Last week, the popular buffet chain Souplantation, known as Sweet Tomatoes outside of Southern California, regretfully announced it will be closing all locations permanently due to the pandemic.
“The FDA had previously put out recommendations that included discontinuing self-serve stations, like self-serve beverages in fast food, but they specifically talked about salad bars and buffets,” Garden Fresh CEO John Haywood told the San Diego Tribune. “The regulations are understandable, but unfortunately, it makes it very difficult to reopen. And I’m not sure the health departments are ever going to allow it. We could’ve overcome any other obstacle, and we’ve worked for eight weeks to overcome these intermittent financial challenges but it doesn’t work if we are not allowed to continue our model.”
In March, the National Restaurant Association predicted that 11% of restaurants could be closing permanently. Hudson Riehle, the Association’s senior vice president of research, said the data shows the industry is in “uncharted territory.”
“Association research found that 54% of operators made the switch to all off-premises services; 44% have had to temporarily close down. This is uncharted territory,” said Riehle. “The industry has never experienced anything like this before.”
Celebrity chefs Robert Irvine and Tom Colicchio are in agreement that changes will have to be made if restaurants are to survive over the next few months as the lockdown restrictions ease.
“Clearly we have to come up with some hybrid model, especially for the next year,” said Colicchio. “Because à la carte dining, with the spacing that [we’ll need to implement], and knowing that most likely bartenders, waiters are going to have to wear masks… People aren’t necessarily going to be very comfortable going to a restaurant like that.”
“A restaurant, like any other business, has a break-even point, and that’s a huge thing when we come into business,” said Robert Irvine. “People need to come back to work, but it has to be done safely. We are not going back to full 300-seat restaurants. We have to let the guests know that it’s safe to come into not only the restaurant but the stores at the same time. People are going to be scared, and … we don’t know what’s going on.”
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