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Pennsylvania restaurant 2021 challenges: Travel limits, GrubHub charges & financial burdens

Neil Strebig
York Daily Record

In March, Scratch Food & Beverage owner Don Mahaney developed a "pay-what-you-can" menu and local market model to help customers who had lost their jobs or couldn't find groceries due to early pandemic shortages

By May, he was running up the hundred-some step staircases along Rialto Street in Pittsburgh's Troy Hill neighborhood in an effort to raise funds for safe food deliveries to food insecure customers. 

Before the end of the year, the restaurant changed its name to Scratch & Co. and launched a retail brand, Scratch & Co. Made Brand. The goal is to cut through the global supply chain and offer locally sourced provisions such as pickles, lunch meat and sauerkraut while ensuring local farmers and commercial ecosystems have an advantage over global and national supply chains. 

"If I hadn’t been taking that approach I’d be talking to you as a former business owner," Mahaney said. "The only reason we’re still in business now is because we changed our entire business model." 

By pivoting weekly, Scratch & Co. became an outlier in the restaurant industry — a 2020 success story.

Now, as the restaurant gears up for several initiatives in 2021, the hospitality industry as a whole sits between catastrophe and recovery. 

Inside Scratch & Co., located at 1720 Lowrie St., in Pittsburgh's Troy Hill neighborhood. Since the pandemic began in March 2020, Scratch owner Don Mahaney has been pivoting his restaurant's business model from a "pay-what-you-can" grocery story to a wholesale business with locally sourced and made goods. His goal he said has always been to make sure his employees have jobs.

The initial wave  

When the pandemic hit in March, I don’t think anyone believed it would last as long as it has. It forced restaurants – an industry accustomed to pivoting – to either take a pragmatic approach or an innovative one.  

Some fine dining restaurants such as The Left Bank in downtown York opted to close before the initial shutdown began. Ride this out in the short term and weigh the damage out later. 

Others, such as Scratch, completely overhauled their menu and concept. “One of my goals was to keep my people employed," Mahaney said. 

That grocery model was emulated here in York through O.N.E. Hospitality’s website and later the RIG-A-TONI food truck would make neighborhood deliveries.  

But even before the July mandates hit – before the industry really got put into a corner here in the commonwealth – we witnessed restaurateurs swivel in any and every direction. Paetron accounts were created, GoFundMe campaigns were launched, and distilleries stopped making alcohol just for our gullets.  

The beginning stages of the pandemic saw Michelin Star restaurants stop serving $75 plates and opting to serve $35 takeout – just to keep the lights on. Some, such as Alinea in Chicago, have found a way forward. Other nationally recognized restaurants such as the Gotham Bar & Grill in New York haven't been so lucky

The fallout of the pandemic has shown that while some restaurant owners may have the savvy to keep pivoting, the industry remains in choppy waters and, in some aspects, is on the verge of capsizing. 

David LeHeron, the owner of the Blue Heron, reflects in the window displaying his Cerified Covid Compliant sign on the main entrance of the Springettsbury Township restaurant. The hospitality industry around central Pennsylvania, the rest of the state and country have struggled during the pandemic.

Rural towns, cities navigate struggles differently

The scope of this pandemic will be dissected for years to come. And all I can do is reflect on what I’ve seen first-hand, the lasting impacts can only be theorized at this stage. 

What we still haven’t considered – fully – is the impact the last 42 weeks have had on the tourism component for towns and city centers throughout the state.  

Travel and tourism figures have hit historic lows. And for every restaurant that can sustain themselves, there’s the closing of a Park House Tavern in Pittsburgh’s Northside, a Dawg House in Waynesboro, or a Miscreation Brewing Co. in Hanover.

The concept of traveling to a new town or city neighborhood has been erased. The notion of falling in love with a tiny hole in the wall only locals know about or trying an almond torte at a local café that the hotel concierge recommended are lost luxuries, as are the out-of-towners many higher end restaurants have come to rely on.  

Related:'Don't expect 2020 to be another $1B year for tourism': Coronavirus hits travel industry

President and CEO of the Pennsylvania Restaurant & Lodging Association John Longstreet expects that the "new normal" will see more than 50 percent of restaurants will close. The restaurant spaces will likely remain vacant, unlike years past when a new eatery may have appeared. 

Inside the Knotty Pine Tavern in Emigsville on Friday, Dec. 11, 2020.  Following a new statewide mandate on COVID-19 mitigation, indoor dining will be prohibited from Saturday, Dec. 12 through Monday, Jan. 4, 2021.

"Banks will be less likely to provide loans for restaurants in states like Pennsylvania with the threat of more government shutdowns and capricious mandates forcing them into bankruptcy," Longstreet said. "Boarded-up spaces will be particularly prevalent in downtown areas, where restaurants are typically the lifeblood of revitalization, so we can expect increased urban blight, crime, and mass exodus, like we are seeing in New York City. 

Instead, without foot traffic, we see a few of these lovable watering holes like Park House, Dawg House and Miscreation leave the communities they’ve become staples in over decades. In other communities, such as Delta in southern York County, a single restaurant like Delta Pizza can find a way to survive.  

Delta Pizza has built a reputation by paying it forward, though in a time of pandemic the lack of competition around Delta (a town with fewer than 1,000 residents) may help. Not unlike the way Scratch found a way to sustain itself and become a resource for its community in Troy Hill. 

It’s where this notion of travel and gatherings comes into play. Urban areas like Chicago, where Alinea resides, have the population size to sustain themselves even through several pivots. As does Pittsburgh – depending on the neighborhood and the restaurant's scope. Philadelphia is undergoing its own challenges with local authorities instituting additional restrictions, but the city may begin to resume indoor dining soon.

Longstreet expects corporate travel, which has historically been customer fodder for fine dining restaurants, will not return to pre-pandemic levels. He expects to see a decline by at least 10 percent even after business returns to normal. 

Continued mandates and restrictions on gatherings pose additional risks for a potential return to normal in states like Pennsylvania where executive orders have come in greater frequency, he said. 

"On the positive side, states like Pennsylvania, within driving distance of major population centers, will receive a quicker return of leisure travel," he said, adding that the state saw an initial bump in the summer of 2020 before additional stay-at-home orders came from the Wolf administration. 

It’s the in-between areas such as York or Harrisburg where the direct competition may hurt smaller businesses because the local population size may not be large enough to contribute to a takeout-only model. 

Here in York, independent restaurants are as well designed for takeout as franchises such as McDonald's or Burger King. A simple trip down Route 30 at 9 p.m. versus Restaurant Row in downtown York highlights the difference in the number of vehicles waiting for takeout outside eateries.

In addition, delivery services as UberEats and GrubHub have been notorious for gouging service fees for restaurant owners. Yet, in areas where it's a 20-minute drive from Dallastown to York, the trip to pick up directly from a restaurant can be burdensome. This is no fault to either the restaurant or customers, it's the nature of smaller commercial hubs and rural areas that populate York County. 

In a downtown area such as Pittsburgh or Philadelphia, one can order and walk to several independent restaurants. Both the convenience and the urge to pick up directly and not from a delivery service are present. Granted, some towns and cities such as Baltimore have begun to consider tapping delivery and service charges from third party apps to help restaurants offset costs

At the moment, no such litigation has been discussed in York, Harrisburg or Lancaster. 

Inside The First Post in Springettsbury Township on Friday, Dec. 11, 2020.  Following a new statewide mandate on COVID-19 mitigation, indoor dining will be prohibited from Saturday, Dec. 12 through Monday, Jan. 4, 2021.

Some issues for the industry remain shelved 

I was in Granfalloon’s Tavern in York the Thursday before Gov. Wolf’s December shutdown on indoor dining began. The staff at Granfalloon’s was unsettled by the news – after all, the next three weeks usually provided staff with enough money to last them through the upcoming lulls of January and February.  

One bartender had an inner conflict over the need for help. He was visibly upset over the order but equally aggravated by the fact he may have to ask the government for financial support. He said he “felt like a socialist.” 

The new logo at Granfalloons Tavern at 41 E. Princess St. in downtown York. Granfalloons, which is now under new ownership between co-owners Dylan Bauer and Josh Hankey, has been closed for renovations and held its grand re-opening on Friday, August 7, 2020.

During the holiday season, ravaged front-of-house employees who work primarily on tips. With the pause, Facebook pages such as "Adopt-A-Server" popped up to help servers and bartenders in need and existing outreach programs such as Pittsburgh Restaurant Workers Aid continued helping

"The survival part doesn't much alter our path from most of 2020. We'll be working to gain financial help for the industry, and as distribution of the vaccine picks up its pace, we'll push for a return of certain business rights such as the ability to seat patrons at bar tops," Pa. Licensed Beverage and Tavern Association executive director Chuck Moran said. 

Between unemployment filing fiascos and working for a temporarily or permanently closed restaurant, front-of-house staff were hit hardest this holiday season. And some industry advocates believe the recent $900 billion stimulus doesn't provide enough relief for the industry, especially with PPP loan forgiveness for independent restaurants, the $120 billion bipartisan RESTAURANTS Act remains shelved. 

In addition, some Pennsylvania restaurants continue to defy mitigation efforts. There's a division among owners regarding the decision, but as a whole restaurants must be concerned about the potential impact that may have on future financial relief from both state and federal lawmakers. 

More:National Restaurant Association survey expects more than a third of Pa. restaurants may close

Related:Gov. Wolf urges Congress to support RESTAURANTS Act & bail out hospitality industry

Yet, while state and federal aid is needed to help sustain the industry, the pandemic has highlighted shortcomings that have long plagued the industry. 

After the first shutdown when restaurants began to re-open, several restaurant owners told me that they had employees who didn't want to return because they were making more on unemployment than they were serving or bartending under the current dining restrictions. 

The argument for an increase to both minimum and tipped wages has been ongoing. The current wages at $7.25 and $2.83, respectively, hasn't increased since 2009. Anyone who has worked as a server or bartender understands that volume is your best friend. If restrictions continue for the foreseeable future, we're potentially looking at a mass exodus for hospitality staff. 

Historically, 13% of tipped wage workers are at or near the poverty level, there's a cause for concern that this issue may not disappear as restaurants continue towards recovery. In addition, before the pandemic hit the #MeToo movement was running rampant in the hospitality industry — a correction to the culture was needed. If a solution is found for either issue, it is often at an individual restaurant or within a specific restaurant group. Progress across the board has still been slow. 

As restrictions and limitations continue amid the pandemic, survival is the main concern for the restaurant industry. Yet, as the industry continues to pivot and reinvent itself, the progress made toward fairer wages and eliminating sexual harassment can't be lost in the shuffle. 

As Mahaney has pointed out, in order to evolve he and his staff have consistently involved all stakeholders within the restaurant's ecosystem as they've continued transitioning. 

It starts with the owner and it continues with the staff, customers, neighborhood and the supply chain — all parties involved need to be taken into consideration as restaurants reposition themselves for the future. 

Neil Strebig is a journalist for the York Daily Record and curator for the York on the Move newsletter. He can be reached at nstrebig@ydr.com, 717-825-6582 or via Twitter @neilStrebig