submitted by Linn Roth
Greg Frank, a co-owner of the Food Fight Restaurant Group in Madison and current Treasurer of our club, gave an overview of the history of restaurants, their current status and future challenges facing the industry during these uncertain Covid-times. Most recognize that the restaurant business can be quite difficult, and operations must survive on very low margins, typically less than 5%. Nevertheless, restaurants are an integral part of virtually every community, and have been so since the late 18th century when the first restaurant opened in France. The first American restaurant established, Delmonico’s in New York City, was established in 1830, and restaurants throughout the world have evolved in a variety of formats over the years.
Since 1970, restaurant sales in the US have grown from $43 billion to approximately $900 billion, with over 17 million employees working in the industry. However, that was before the Covid crisis struck and severely impacted virtually all types of restaurants. The situation in Madison is no different than any other area in the country. Restaurants are struggling to change their business models and survive until the crisis has ended. Unfortunately, lay-offs have been rampant, and other common changes include a focus on delivery and curb-side pickup, as well as outside dining whenever possible.
Regardless of when the health crisis ends, it seems likely that restaurants will be making a considerable number of changes to survive and prosper in the future, and Greg touched on several of these that we could expect to see. For example, establishments might become smaller to reduce capital costs, incorporate new technologies (e.g. wireless links and digital menus) to improve efficiency, offer limited gourmet dining, provide prepackaged meals and drive-through pickup, and even use “ghost kitchens” that provide food to a number of establishments utilizing a single, centralized kitchen.
Certainly this industry will change significantly over the near and longer-term future, but it behooves all of us to support our local restaurants in order to enable this essential component of our community to evolve and prosper.
If you missed our meeting this week, you can watch it here: https://youtu.be/dD1t2pI3MuY.