Coronavirus Recession

[morekaos]

...first, make them dependent on government and not want to return to work...

She got a forgivable loan. Her employees hate her for it.

Jamie Black-Lewis felt like she won the lottery after getting two forgivable loans through the Paycheck Protection Program. 

Black-Lewis saw the $177,000 and $43,800 loans, one for each of the spas she owns in Washington state, as a lifeline she could use for payroll and other business expenses.

She’d halted pay for the 35 employees — including herself — at Oasis Medspa & Salon, in Woodinville, and Amai Day Spa, in Bothell, in mid-March, when nonessential businesses in Washington closed due to the coronavirus pandemic.
When Black-Lewis convened a virtual employee meeting to explain her good fortune, she expected jubilation and relief that paychecks would resume in full even though the staff — primarily hourly employees — couldn’t work.

She got a different reaction. 

“It was a firestorm of hatred about the situation,” Black-Lewis said.

The animosity is an unintended consequence of the $2.2 trillion coronavirus relief package enacted last month.

The anger came from employees who’d determined they’d make more money by collecting unemployment benefits than their normal paychecks.
“It’s a windfall they see coming,” Black-Lewis said of unemployment. “In their mind, I took it away.”

“I couldn’t believe it,” she added. “On what planet am I competing with unemployment?”

https://www.cnbc.com/2020/04/22/she-got-a-paycheck-protection-loan-her-employees-hate-her-for-it.html

 

[eyephone]

CNBC article: Landlords are worried increasingly fewer tenants will pay rent as coronavirus job losses mount

The economic effects of Covid-19 continue to mount, with rising job losses and falling consumer confidence. As of April 26, 91.5% of renters in professionally managed buildings had made full or partial payments. That compares with 95.6% during the same period last year, according to the National Multifamily Housing Council. 

While landlords for both multi- and single-family properties are trying to work with their tenants, offering temporary rent reductions and repayment plans, there is no government bailout for renters. There is a forbearance plan for mortgage borrowers under the CARES Act, allowing them to delay payments for up to a year. For renters, the act forbids evictions for 90 days, but little else.
https://www.cnbc.com/2020/05/01/coronavirus-landlords-are-worried-more-tenants-wont-pay-rent.html

 

[qwerty]

@nsr - no I don’t think there will be a lot of demand. Restaurants will continue to get shafted. I guess let them open at least 50% capacity to allow them to generate more revenue.

 

[Bullsback]

The article was just around the reopening guidelines, so not sure if it’s causing people not to go.

From one side it may encourage people to go since it is potentially safer. The flip side would be longer waits to get in.

I agree a 25% opening probably doesn't create much of a lift in revenue, but it still should be improvement. If restaurant was already open for takeout today, they don't need more cooks, they have the same rent (either way), so just run with a reduced server staff and maybe you get a little better. But to your overall point...it isn't a huge difference. 

 

[irvinehomeowner]

Olive gardens are open in Georgia. Only 10 customers allowed per 500 sq ft of ding space. Texas is allowing restaurants to to open but only at 25% capacity.

How do they expect the restaurants to make any open. At 25% capacity it’s probably not even worth it to reopen.

This kind of reopening may make things worst. This kind of goes back to my point of how we need to do all or nothing. I suppose it’s better than nothing

Let's do some math in a non-math thread.

What is the percentage breakdown of an eatery's business BC (Before Covid... I'm going to patent that)? 80% dine-in, 20% takout?

So during Covid, would you estimate 0% dine-in 40% takeout/delivery so a 60% drop in business?

So with 25% capacity, wouldn't the math be 20% dine-in, 40% takeout/delivery so only a 40% drop in business? And if you hope that that dine-in and takeout are higher dollars, maybe you are looking at only a 25-30% drop from BC?

I think any increase will help, even if just 25% capacity.

 

[bones]

Olive gardens are open in Georgia. Only 10 customers allowed per 500 sq ft of ding space. Texas is allowing restaurants to to open but only at 25% capacity.

How do they expect the restaurants to make any open. At 25% capacity it’s probably not even worth it to reopen.

This kind of reopening may make things worst. This kind of goes back to my point of how we need to do all or nothing. I suppose it’s better than nothing

Let's do some math in a non-math thread.

What is the percentage breakdown of an eatery's business BC (Before Covid... I'm going to patent that)? 80% dine-in, 20% takout?

So during Covid, would you estimate 0% dine-in 40% takeout/delivery so a 60% drop in business?

So with 25% capacity, wouldn't the math be 20% dine-in, 40% takeout/delivery so only a 40% drop in business? And if you hope that that dine-in and takeout are higher dollars, maybe you are looking at only a 25-30% drop from BC?

I think any increase will help, even if just 25% capacity.

Fat finger thank you.
Do you really think restaurants (not fast food or fast casual but real restaurants) around here are doing double the take out business?  At best, I think it’s flat or slightly up.
If you read around, most restaurants aren’t rushing to open at 25-50% capacity. Numbers don’t pencil.

 

[irvinehomeowner]

@bones:

I think some are. I've posted before how Olive Garden has been a long wait and the last time I went there, it was probably 10 other cars waiting and they all had big orders.

I agree with the point you made about additional expense with PPE and sanitization protocols, it doesn't math out for some, but for others, even just takeout will work.

There are at least 3 places that have been closed since March that have reopened or are reopening on May 4th... so if just takeout is enough for them to reopen, maybe 25% dine-in is too.

If I was a mom/pop shop... where my payroll expense is probably lower than others... I would try it.

 

[bones]

@bones:

I think some are. I've posted before how Olive Garden has been a long wait and the last time I went there, it was probably 10 other cars waiting and they all had big orders.

I agree with the point you made about additional expense with PPE and sanitization protocols, it doesn't math out for some, but for others, even just takeout will work.

There are at least 3 places that have been closed since March that have reopened or are reopening on May 4th... so if just takeout is enough for them to reopen, maybe 25% dine-in is too.

If I was a mom/pop shop... where my payroll expense is probably lower than others... I would try it.

Fair points.  I think the restaurant industry is so nuanced with size/location/food type/price points that it will vary.
I'm still not sure how profitable take out is - with delivery app fees, discounted prices, labor, etc.
But like everything else, it'll be survival of the fittest, restaurants need other restaurants to fail to gain market share.

 

[irvinehomeowner]

Delivery is tough.

Some restaurants are asking customers to call them directly instead of DoorDash/GrubHub/UberEats because they've repurposed their wait staff into delivery drivers.

Most of the hot food I buy is takeout because I know delivery eats into the bottom line of the business... plus it gets me out of the house.

#familydistancing

 

[iacrenter]

The absurd part about social distancing is, it does not applies to flying. Even when the middle seat is blocked, you know that you still 2 feet away from someone next to you.

So is the FAA going to enforce this? Hell, no. Because the airlines will need every ticket sale that they can get their hands on.

Try the new "Janus Seat" on  your next airplane trip:

 

[usctrojancpa]

Olive gardens are open in Georgia. Only 10 customers allowed per 500 sq ft of ding space. Texas is allowing restaurants to to open but only at 25% capacity.

How do they expect the restaurants to make any open. At 25% capacity it’s probably not even worth it to reopen.

This kind of reopening may make things worst. This kind of goes back to my point of how we need to do all or nothing. I suppose it’s better than nothing

I 100% agree with you, this "partial" reopening isn't going to do much to help things. However, I think if we reopened things fully I don't think you'd see restaurants even 50% full because of the worry of getting sick. People won't feel comfortable to into congested areas until there is at least good treatments for the virus (or maybe even a vaccine).

 

[usctrojancpa]

Not a conspiracy at all. It happened in plain view.

The juice flowed even before the the lemon squeeze.

Hence, funds never gotten to the small shops and emptied quickly and the second rounds lined up.

I got an email from BofA this morning that the SBA has assigned a loan number for my PPP loan so I'm in the home stretch. From what I read on a BofA community forum is that the next step is to get an email a link to complete the loan docs electronically and then funds get deposited into the business account within 1-2 days of signing those docs.

 

[WTTCHMN]

IRS Denies Deductions Tied to Small-Business Loans
https://www.morningstar.com/news/do...eductions-tied-to-small-business-loans-update

 

[irvinebullhousing]

Not a conspiracy at all. It happened in plain view.

The juice flowed even before the the lemon squeeze.

Hence, funds never gotten to the small shops and emptied quickly and the second rounds lined up.

I got an email from BofA this morning that the SBA has assigned a loan number for my PPP loan so I'm in the home stretch. From what I read on a BofA community forum is that the next step is to get an email a link to complete the loan docs electronically and then funds get deposited into the business account within 1-2 days of signing those docs.

Cool, nice to know it works the second round.

 

[usctrojancpa]

Not a conspiracy at all. It happened in plain view.

The juice flowed even before the the lemon squeeze.

Hence, funds never gotten to the small shops and emptied quickly and the second rounds lined up.

I got an email from BofA this morning that the SBA has assigned a loan number for my PPP loan so I'm in the home stretch. From what I read on a BofA community forum is that the next step is to get an email a link to complete the loan docs electronically and then funds get deposited into the business account within 1-2 days of signing those docs.

Cool, nice to know it works the second round.

Yeah, I got an email from BofA that my PPP loan was submitted to the SBA Tuesday morning (April 28th) so my loan will probably be funded with the second round of funds. It feels like the big boys got most of the first found of funds and us smaller guys will get most of the second round.

 

[irvinehomeowner]

So many protests.

I hope they are right and Covid is not as serious as it seems.

Is the possibility of 100k deaths high enough to condone the lockdown measures?

What will the protesters do if infections/deaths escalate again?

 

[eyephone]

Coronavirus fallout hits J. Crew as retailer files for bankruptcy
https://www.foxbusiness.com/money/coronavirus-fallout-hits-j-crew-as-retailer-files-for-bankruptcy

 

[freedomcm]

Another big factor is even with 25%, those folks are very likely to be getting drinks/apps/deserts which add substantially to restaurant's bottom line.

Olive gardens are open in Georgia. Only 10 customers allowed per 500 sq ft of ding space. Texas is allowing restaurants to to open but only at 25% capacity.

How do they expect the restaurants to make any open. At 25% capacity it’s probably not even worth it to reopen.

This kind of reopening may make things worst. This kind of goes back to my point of how we need to do all or nothing. I suppose it’s better than nothing

Let's do some math in a non-math thread.

What is the percentage breakdown of an eatery's business BC (Before Covid... I'm going to patent that)? 80% dine-in, 20% takout?

So during Covid, would you estimate 0% dine-in 40% takeout/delivery so a 60% drop in business?

So with 25% capacity, wouldn't the math be 20% dine-in, 40% takeout/delivery so only a 40% drop in business? And if you hope that that dine-in and takeout are higher dollars, maybe you are looking at only a 25-30% drop from BC?

I think any increase will help, even if just 25% capacity.

Fat finger thank you.
Do you really think restaurants (not fast food or fast casual but real restaurants) around here are doing double the take out business?  At best, I think it’s flat or slightly up.
If you read around, most restaurants aren’t rushing to open at 25-50% capacity. Numbers don’t pencil.

 

[eyephone]

free - you are correct
But consistent foot traffic is key.

As I previously stated the businesses that just got by before covid might close the doors.

Another big factor is even with 25%, those folks are very likely to be getting drinks/apps/deserts which add substantially to restaurant's bottom line.

Olive gardens are open in Georgia. Only 10 customers allowed per 500 sq ft of ding space. Texas is allowing restaurants to to open but only at 25% capacity.

How do they expect the restaurants to make any open. At 25% capacity it’s probably not even worth it to reopen.

This kind of reopening may make things worst. This kind of goes back to my point of how we need to do all or nothing. I suppose it’s better than nothing

Let's do some math in a non-math thread.

What is the percentage breakdown of an eatery's business BC (Before Covid... I'm going to patent that)? 80% dine-in, 20% takout?

So during Covid, would you estimate 0% dine-in 40% takeout/delivery so a 60% drop in business?

So with 25% capacity, wouldn't the math be 20% dine-in, 40% takeout/delivery so only a 40% drop in business? And if you hope that that dine-in and takeout are higher dollars, maybe you are looking at only a 25-30% drop from BC?

I think any increase will help, even if just 25% capacity.

Fat finger thank you.
Do you really think restaurants (not fast food or fast casual but real restaurants) around here are doing double the take out business?  At best, I think it’s flat or slightly up.
If you read around, most restaurants aren’t rushing to open at 25-50% capacity. Numbers don’t pencil.

 

[bones]

But it’s not 25% evenly distributed. For many restaurants, 100% capacity during key times on fri/sat/sun helps to cover the rest of the week. Now you’re at 25% capacity for those days and less than that for the other days. None of this adds up for me and it all eats into already razor thin margins.