State’s restaurants keep fighting to stay alive | MS Business Journal

Richard Chenoweth

Richard Chenoweth, owner of Scranton’s in Pascagoula

For the Mississippi restaurant industry, like those nationwide, the early shelter-in-place months of the Covid pandemic were costly and uncertain. 

Fortunately for them, Mississippians never really lost their taste for dining out, even if that meant burgers and fries. 

“Restaurant tax collections saw a decline for shelter in place in March and April. Beyond that, the decrease in tax collections is not significant. It’s pretty much at a level that it was last year,” said Pat Fontaine, executive director of the Mississippi Hospitality and Restaurant Association which has 1,200 member locations. There are a total of 4,800 food services establishments in the state.

Fontaine said the positive sales tax collections indicate people still patronize restaurants, just not in the traditional dine in way. Even during the shelter in place phase, he said, “people were patronizing fast-food restaurants.”

Member restaurants were quick to offer pick up and delivery service and to focus their marketing on the safety aspect of dine-in service, he said. 

“Those operations have somewhat maintained a high level of sales compared to the year prior.

Richard Chenoweth, owner of Scranton’s in Pascagoula, used the shelter in place downtime to reconfigure his 38-year-old restaurant into a fast-casual dining destination. He recapped the project’s progress regularly on Facebook to keep his customers in the loop. “With chaos comes opportunity,” Chenoweth said of the upgrades he made, including the addition of a market for grab and go sandwiches and family meals. “We updated from 1982 to 2020.”

Fontaine said some member restaurants in the 19 Leisure and Recreation Districts throughout the state “are actually ahead of last year’s numbers.”

Restaurants and bars within the boundaries of a Leisure and Recreation District are allowed to serve mixed drinks to their customers who can leave with a to-go cup but they have to stay inside the LRD boundaries.

During the pandemic emergency,  the state is allowing alcohol drinks in the “to go” orders for curbside pick-up if the restaurant or bar is in a designated LRD.

Fontaine said the city of Jackson expanded its leisure district to take in the entire incorporated area. “It’s been very helpful to Jackson restaurants,” he said. 

Some restaurants in smaller communities also are seeing sales at the same level or a little better now. “They’ve done what’s necessary to capture what market there is,” Fontaine said.

There have been some restaurant closings, though there’s not an exact count. “We’re not contacted when that decision is made,” Fontaine said. “We find out through our travels around the state and our billing online.”

Fontaine cited a Japanese steakhouse in the Jackson area that had been in business for decades that shut down because of the effect distancing requirements had on sales. A seafood restaurant chain in the state also closed. Still, Fontaine said, “We’ve seen some close but not to the extent we anticipated early on.” Federal funds kept many open. 

A majority of restaurant association members received Paycheck Protection Program loans to continue operating. Early on, unemployment benefits did make it difficult for owners to find workers 

“We are fortunate that the majority of restaurants continued operating,” Fontaine said. But with the current 75 percent occupancy restriction, the concern is how long owners can keep going. 

“There is a need for restaurants and all small businesses to get some further relief in another round of PPP loans from the federal government,” he said. If that doesn’t happen, “we may start to see more closures.”

Even with the federal funding boost, owners whose restaurants have weak sales volumes may soon have to decide if they can or will stay open. “We’re looking toward end of year for those who are only at 50 or 60 percent sales volumes to make a decision. Do I have funds to continue and do I want to,” he said.

The biggest question now is what consumer behavior is going to be like in the future. “There is still a segment of the population that is fearful to return to dine in. It’s people who have yet to have a meal out, picked up or delivered,” Fontaine said. “We’re all hopeful we’ll be back unrestricted sometime in the first quarter of next year. It might be February or March but the hope is we will be unrestricted and entering the new normal.”

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