Many U.S. Restaurants Likely to Reopen with 50% Pre-COVID Seating Capacity

15 May 2020

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Many U.S. restaurants are likely to reopen from widespread shutdowns at 50 percent pre-COVID-19 seating capacity amid efforts to adhere to social distancing practices and give confidence to cautious consumers, according to a new CBRE report.

 

As the U.S. prepares for phased reopenings, restaurant owners and landlords will attempt to ease consumer fears of being in public places by maintaining social and physical distancing practices. This likely will require up to six feet of distance between tables in dining areas, which could result in temporary reduction of seating capacities by as much as 50 percent.

 

The low-margin restaurant industry has been hard-hit by stay-at-home restrictions. Many restaurants have closed completely. Those that have remained open with take-out and delivery services are estimated to have only been able to generate 10-20 percent of sales. The National Restaurant Association estimates that the industry will lose $50 billion in April sales, and a survey by the James Beard Foundation on April 16 revealed 28 percent of small and independent restaurant owners don't believe they can survive another month of closure

 

The food & beverage industry is perhaps the most dynamic segment of retail, but it will reopen cautiously as a more sterilized, controlled environment to ease consumers’ concerns about spending time in public places,” said Meghann Martindale, global head of retail research for CBRE. “Temporary seating restrictions will hopefully alleviate some of these concerns, allowing restaurants to recover a portion of their sales and stay afloat until seating capacity increases. However, owners will still have to explore new avenues for revenue to cope with this interim seating reduction, and, we may see new lease structures to help restaurants stabilize.” 

 

In many cases, restaurants will continue to offer more off-premise services such as drive-thru only where available, curbside pickup and no-contact home delivery for picnic packs, private dining and family meals. Creative new lease structures and management agreements are being struck and deals will further evolve into partnerships between restaurants and landlords for long-term stabilization.

 

Restaurant owners and landlords may also implement other measures to protect consumers, such as reconfiguring waiting areas to use outdoor queues and even asking patrons to wait in cars to avoid crowding. Off-premises services will graduate to the opening of outdoor seating and patios, dining rooms, and eventually bars. Physical barriers such as plexiglass partitions around hostess stands and registers provide additional layers of protection.

 

To download the report, click here.

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