[wil421]

The financial crisis didn’t prevent most people from spending money on entertainment or eating out. People scaled back spending or went to cheaper places.

People are fearful and a lot of folks are supposed to be sheltering in place. Business are being told to do takeout only which is a huge difference.

I was in the restaurant industry during the last crisis. Lots of places stopped hiring and slowed down but business didn’t suddenly stop.

[duxup]

>Business are being told to do takeout only which is a huge difference.

Yeah I've been doing a fair amount of takeout and places where you had dozens of people ... operating with two or three people now.

[alharith]

My brother is a restaurant owner and reports that despite volume being down, profit is up due to less overhead. Others in the restaurant industry are reporting the same. When we come out on the other side of this, I think a lot of businesses are going to rethink a lot of things they held on to as infallible truths.

Sorry as many mentioned, yes the key ingredient is takeout: This is a fast casual italian / pizza restaurant. I find fast casual restaurants doing just fine in my area. It's traditional sit downs that are struggling.

[wil421]

Almost every restaurant owner I know is about to fold or taking emergency loans. From people with several franchised sandwich shops to stand alone restaurants.

Who is reporting profits are up?

[bitbuilder]

I'm guessing they're confusing profit and margin. It wouldn't surprise me if margins were higher now, but I have a hard time believing overall profits are up, anywhere.

Especially when you consider a lot of restaurants make a good chunk of their profit on alcohol sales. While many are offering alcohol to go, I think most of us are picking it up from the corner store instead.

[kamarg]

Anecdotally, the owner of one of the nearby pizza places mentioned that both profits and margins are up for her. Of course pizza places historically have a large amount of delivery already. I imagine the current crisis has driven more customers to them at the expense of places that are traditionally dine-in only.

[sbuttgereit]

Did his business already have a robust take-out business? If so, I wouldn't be surprised by this comment. I would expect revenues, for awhile, to be the same or even increase... though as individual customers circumstances turn less certain I would expect that to decline over time. Certainly there's less labor overhead, and slightly less expense for utilities, cleaning supplies, etc. But larger pieces, like rents, would remain the same absent some sort of accommodation for the crisis.

A business that didn't have a robust take-out business prior to the crisis I would expect to fare worse. You'd have to do things like get the word out that you are a take out business for one... and some couldn't likely make that transition. Would you order fine dining take out? Sure the food might be good, but half the reason to go to a good restaurant, rather than a cheaper one, is the service.

[itronitron]

My personal experience has been that quality of restaurant/food/dining experience has always been negatively correlated with number of tables, or even total sq. ft.

[duxup]

I think fast casual already did that and going say delivery only ... might be a dead end for most small businesses.

Especially as folks get out of their homes and WANT to be out and about ;)

[thaumasiotes]

Is the change something that can be stabilized? Or when people have the option to eat out again, will delivery-only restaurants suffer too much from competition with eat-in restaurants? (Assuming there's some level of customer preference for eating in?)

Now I'm curious about pizza places. Most pizza places offer seating. But I feel like Domino's might in fact be delivery-only.

[bluedino]

They might be making more money on sales vs staff right now but anyone who has a rent payment isn't going to cover it with takeout alone.

[greedo]

For most major fast food franchises, the drive through constitutes a majority of the food sales. Labor also constitutes the largest line item on a P&L, so if you can work it right, you might be able to make it work. Especially if you're getting assistance (in the form of suspended franchise/royalty fees).

[bluedino]

Cheesecake Factory can't make rent this month - https://www.cnn.com/2020/03/26/business/cheesecake-factory-a...

[Jupe]

Of course there's less overhead, they are employing fewer people (or drastically reducing paid hours for employees). That's kind of the point of the parent article.

[phasnox]

This. It makes you wonder how much long the confinement can really last.

[toomuchtodo]

I imagine those less at risk will eventually give up on confinement and continue on with their lives, forcing those at risk (risk factors, 60+, immunocompromised) to remain confined voluntarily or risk a greater chance of death by venturing out. Those not at risk (younger and healthier) will be prioritized for triage and ventilator access if they do get sick.

You can't expect people to shelter in place indefinitely, and they won't.

[SketchySeaBeast]

I think the next couple of weeks are going to be eye opening - we're going to get a lot of reports of deaths, even of the young and healthy, which we're already seeing. That should steel the collective resolve to last a while here. People are talking of lifting the restrictions and our collective endurance and things have barely gotten going. It's really complaining about the length of the red light when it's just turned yellow.

Naturally people aren't going hole up for a year, but we have to stop acting antsy when we've been in our houses a week or two.

Edit: I'm assuming the government does its job and takes care of its people so that they can do the right thing here.

[marvin]

The government is passing relief package of 18,000 dollars for every citizen of the USA. That's more than enough money to tide things over if it's distributed well, in a way that incentivizes the right things.

Unforunately, a very small portion of that money will go to individuals who have lost their jobs, and a very large portion will go to companies that were run on razor-thin balance sheets, ready to topple at the first sign of trouble. No incentives to run things properly the next time around, and limited help for regular people. While costing everyone a fortune in the form of inflation the next few years.

[tstewart161]

I’ve heard this point made a lot, that these “bailouts” are in any way equivalent to previous bailouts based on poor management and immoral business practices.

These aren’t the same. This shutdown (however justified) is because of the govt. If the government demands you shut down your business, or that you can’t go to work, you deserve to be compensated for that. If the government hadn’t mandated it, young people would still be out working and spending. Those businesses would be fine. If the govt wants to shut everything down, they have to pay people for it.

[Arainach]

Businesses (including many of those demanding bailouts) have spent unprecedented amounts of money on stock buybacks in the last decade. If citizens are expected to have a reserve fund to handle unexpected crises, so should businesses.

[bigbob2]

The alternative seems to be to let millions get sick en masse, potentially leading to similar shutdowns for longer time periods (i.e. failing to "flatten the curve"). I don't think you can claim those businesses would be fine unless you define a timeline to go with your assertion; say, "those businesses would be fine for n weeks."

[ls612]

The other thing is that half of the cost is in the form of low interest loans and loan guarantees, and presumably most of those will not default if this doesn’t go on too long and thus won’t actually be real costs

[ars]

If those companies go under they take a lot of jobs with them. It seems more efficient to prop them up instead of making direct payments to the employees who would have lots their jobs.

Especially since a lot of the companies are only asking for loans, not handouts.

[toomuchtodo]

> Naturally people aren't going hole up for a year, but we have to stop acting antsy when we've been in our houses a week or two.

It's natural to be antsy if you've lost your job, have no social safety net, and can't pay for food or your rent.

Either pay them to stay home, or don't be surprised when they leave to attempt to make a living to survive. They're already at risk of being homeless and destitute, so COVID matters much less to them. And I don't blame them.

[SketchySeaBeast]

I agree. Let's pay people so that everyone can do the right thing in this time of crises.

[evan_]

> I'm assuming the government does its job

What has led you to make this assumption?

[brewdad]

State and local governments are doing a good job in many locales. Assuming more Governors don't follow the jackwagon leading Mississippi and override local efforts, the situation should improve despite the lack of leadership and execution at the federal level.

[murph-almighty]

What's going on in Mississippi?

[SketchySeaBeast]

It could very well be a bad assumption, but efforts seem ot be being made now to get people support. Hopefully they get there or this is going to be really bad.

[noarchy]

>Hopefully they get there or this is going to be really bad.

The right thing for governments to do is to help mitigate the damage they've caused by ordering massive shutdowns. They can't do one without the other otherwise, indeed, it will be really bad.

[sharken]

Got any data to support your claim, otherwise I could argue that risk factors, 60+, immunocompromised are the MAJOR concerns as stated above. Looking to Italy and Spain seems to confirm this view.

[sixothree]

Everything suggests this is taking a dark turn in the coming days. I'm doing my best to stay safe.

[wpietri]

Does it? Let's set aside the scorekeeping systems we use (money, profit, ownership, wealth) for a moment. I see no reason to think we can't get people properly fed indefinitely. We'll still have power, water, sewage, bandwidth. And it's not like the shut down businesses will evaporate or anything. The buildings will be there. The equipment will be there. 97%+ of the staff will still be around.

Eventually we'll have a vaccine, and life can go back to normal (if we want). The main problem in the interim is keeping everybody from freaking out because the before-times social constructions weren't really set up for a global pandemic. But we can fix that if we want.

[crazy1van]

> We'll still have power, water, sewage, bandwidth

Don’t forget about food. There’s a lot of complexity and people involved in getting food from a farm to your local restaurants and grocery stores.

If it gets really bad and even a fraction of people in these industries stop working, stay-at-home life might get a lot less comfortable.

[wpietri]

As you can see from the sentence before the one you quoted, I didn't forget about it.

I agree there's a lot of complexity there. But it's still a relatively small slice of the population. A friend is a farmer; she's just carrying ahead farming. Compared with urban life, she's been "socially distancing" for years. For the more dense parts of the chain, we need to take other infection-prevention measures. But food production is already pretty good at keeping things clean, and the rest we can work on.

[vkou]

Food production is essential work, so nobody is stopping it.

We are about to have millions unemployed. Any job vacancy will be trivial to fill.

I wouldn't be concerned about the food supply.

[carapace]

It's worth remembering how efficient our modern food systems have become that less than 3 out of 100 people are enough to work them.

That said, it wouldn't hurt anything to start a "victory garden", it's the right time of year. https://en.wikipedia.org/wiki/Victory_garden (but that's a good idea anyway, orthogonal to the virus.)

[op03]

Things stop all the time.

You just need to find the right event for comparison. In this case probably the 2004 Indian Ocean Tsunami or the 2011 East Japan Earthquake (Tsunami, Fukushima Nuke plant etc)

[sbuttgereit]

I don't think that comparison works.

There, you had relatively short duration disasters where very soon afterwards, coordinated efforts were dedicated to putting the pieces back together.

Now, most of the press and leadership seems to be thinking only about how to manage the health related consequences of an ongoing crisis. I really don't hear anyone strategizing how to put the pieces back together or how to contain the crisis (note that I did not say contain the disease) so things don't fall apart so completely. There is a profound absence of thought amongst those in decision-making positions, at least insofar as I can see.

[RandomBacon]

Everyone can go right back to work after the event is over in a few minutes.

This more comparable to a nuclear bomb where the area is still radioactive and people cannot go back without PPE.

Edit: and like another reply said, this isn't local, so it's more like multiple nuclear bombs in multiple countries across the globe.

[tathougies]

So they don't stop all the time. Those events you gave did not cause 3 billion people to be forced to stay at home. A tsunami or earthquake is isolated to a particular place. It may affect a few million. This is a different order of magnitude