How Hurricane Sandy is Affecting Restaurants in NYC
As the aftermath of Hurricane Sandy turns into a nearly week-long ordeal, people keep asking how our local businesses are being affected. With power still out and transit still in flux, it's hard to assess the true scope of the damage. But for restaurants in areas heavily hit by the storm, chefs and owners will tell you themselves: this is not a good time to be a small business owner.
We've been talking with food businesses about how the storm has affected them. Their inventory of current food has spoiled. Every day they're closed is a day without revenue to cover fixed costs like rent and payroll. And when the lights come back on and there's time for recovery, there will be costly cleanups and investments in new equipment to replace the damages.
Christophe Hille, the owner of Northern Spy Food Co. broke down just what that means for his company:
Every day that goes by is a huge loss to us due to lost income, continued fixed expenses, and payroll that we're extending. Our managers are on-call and will be paid but we cannot afford to float our hourly employees...The back-of-napkin estimates for us if we're closed seven days total:
$40,000 in lost income
$6,000 in carried payroll
$6,000 in lost inventory
-$17,000 in products not purchased
$35,000 conservative estimate of cost of this event.
Earlier in the blackout, Northern Spy held an impromptu sidewalk buffet for neighbors, completely free of charge. It was a generous way to make sure food stock made its way into hungry bellies. But by now all the food has spoiled, and even if it hasn't, "there's no practical way for us to give it to anyone, because no one who could use it has power or transportation of their own." Other restaurants wish they could do the same. "We like to take care of our neighbors, and it's frustrating that we can't provide for them," remarked Harold Dieterle, whose West Village restaurants Kin Shop and Perilla are stuck in limbo until the power comes back on.
When your restaurant operates on low margins, a few closed days adds up fast. Sara Jenkins, the chef-owner of Porsena and Porchetta, estimates similar losses to Northern Spy's so far, with more piling up by the day. More businesses told us on Twitter how the past few days have affected them:
@seriouseatsny We are easily losing what amounts to a month or two of rent, not to mention the loss of everything in the fridge.— Prohibition Bakery (@ProhibitionBake) October 31, 2012
@seriouseatsny tonight should have been our second busiest day of the year. No power. No biz.— Mr. Dennehy's (@MisterDennehy) October 31, 2012
Even for those with insurance, it's far from a guarantee that these losses can be recuperated. And it's hard to estimate how far into the future, and how greatly, they'll hurt bottom lines. But for many, the rough answer is "a long time," and "a lot."
It's especially bad for restaurants that saw damages to their kitchen space and equipment. The Red Hook bakery and smokehouse of Mile End, for example, has been destroyed and is in need of serious repair. Also in Red Hook: the Red Hook Lobster Pound, which estimates hundreds of thousands of dollars in losses. They're getting help from local businesses with donations of labor and equipment, but "the biggest problem is gasoline" says the Pound's Sandy Kovich. "It's a crisis." With reserves running out soon and with no word yet on the return of electricity, all they can do is rebuild by hand. "We're very blessed," Kovich continues. "And we're very resourceful. We built the Pound once by hand, and we can do it again...That's what we do in Brooklyn. We help each other."
None of this accounting includes the impact on restaurant staff, many of whom work hourly and are without income for days. "I'm sure some of my guys who work two jobs are thrilled right now," says Jenkins, who employs 25 to 30 people between her two restaurants. "But by the time we're ready to open I'm sure they'll be ready to work fifteen hour shifts" in order to make up some lost income. Though the bulk of significant restaurant closures is limited to specific geographic areas, the storm has affected a staggering number of people who make their living in the food service industry. Sandy's damage will have many echoes and economic multipliers in the months to come, and this is one of them.
Some restaurants are doing the best they can in spite of grim prospects. Motorino was still selling pizza earlier this week, with dough mixed by hand in their dark kitchen. You don't need a wood-burning oven to serve drinks, only some candles and a steady source of ice, which is what Michael Neff's Ward III did in Tribeca. And Chinatown is starting to see the beginnings of recovery, with noodles cooked over gas flames.
Business above of the blackout zone north of 34th Street is, selectively, booming. Restaurants that didn't before are commanding hour-long waits as people flock to midtown, the Upper West, and the Upper East sides in search of power, cell phone service, and a full meal. This tweet kind of says it all:
For today and the coming week, being in food service just north of 30th St. is a killer business model.— Northern Spy Food Co (@northernspyfood) October 31, 2012
It's great news for everyone seeing positives come out of this storm (not enough of those to go around). But as subway service is restored in parts of the city, and the luckier among us start moving towards something a little more normal, we should remember that others don't have the chance to move forward yet. "I can't do anything until I open, and I can't open until the electricity is back," Jenkins remarked.
You don't have to overthink it much to see what looks like parallel cities emerging. As uptown Manhattan and parts of Brooklyn start to get back on their feet, neighborhoods like the Lower East Side and Red Hook are still hurting. "It's like a whole other world north of 40th Street," Dieterle points out. "Like you're back in civilization." And that's to say nothing of flooded New Jersey, or Long Island, where as much as 80% of homes and business are without power. Or the Rockaways, which Kovich (who also lives there) claims "look like New Orleans [after Katrina]."
Once restaurants can re-open, "the biggest challenge for us is getting people to come back," says David Schneider of Oaxaca Taqueria, which has locations in lower Manhattan and Brooklyn. "You kind of lose momentum with people feeling comfortable eating out. Con Ed can throw the switch back on, but that doesn't mean you'll have people rushing out to eat."
So what can we do? Grubstreet has some great pointers on ways to help restaurants in need, including spreading your spending around, letting restaurant owners who might not know that they can apply for disaster assistance from FEMA, and volunteering for restaurants that need a hand. "If you can hold a hammer, come on down," says Kovich.
We'll repeat the message that we and others have been saying for a few days, in one form or another: eating out right now is essentially an act of public service. Particularly if you can do so in neighborhoods heavily affected by the storm, once power is restored and it's safe to travel. Your favorite restaurant in the East Village? Maybe it's time to pay another visit. That place you want to check out in Red Hook? Head there now. (Some links to bookmark monitoring restaurant openings.) Once you get there, consider it a conscience-free opportunity to splurge—perhaps you can order that extra bottle of wine. And certainly remember to tip extra generously; many service industry workers rely on those tips for basics like food and rent, and every bit counts.
Of course plenty of people can't afford to do that right now, or aren't able to eat out at all. But if you can, it's the most delicious way to make your dollar count.