In light of COVID-19 pandemic, Asian restaurants face new challenges

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Ray Mo

Japanese restaurant Wild Ginger on 116th has temporarily closed in light of the COVID-19 pandemic and recent stay-at-home orders. Tiffany Zhou, co-owner and operator of the restaurant, said she is looking into offering takeout services.

Sam Hawkins

On March 16, Indiana Governor Eric Holcomb announced that all restaurants would be required to close their dine-in services and shift to delivery and curbside pickup only. This has left many restaurant owners and their employees either with reduced income or no income at all, as many restaurants didn’t offer delivery services before the pandemic. Massive numbers of workers have been laid off; between March 1 and April 10, three million jobs in the restaurant industry were lost, according to the National Restaurant Association.

“This time is not about profits, it’s about survival. It’s just about covering the costs needed to survive. I doubt there is a restaurant in the state that will make a profit in March or April,” Greg Fisher, professor of business management and entrepreneurship at Indiana University’s Kelley School of Business, said via email.

Fisher said that, broadly speaking, there are three ways he could see restaurant owners responding in this situation. First, they could completely shut down and seek other ways of financing, such as selling gift cards to be redeemed at a later date or asking for loans. Second, they could switch entirely to delivery and takeout, and find ways to make these services more efficient while socially distancing. The final course of action, he said, could be to use restaurant facilities for other purposes, such as producing hand sanitizer or serving healthcare workers.

Trent Williams, also a professor of business management and entrepreneurship, said that takeout-friendly models of business can be a difficult transition, not only because it is a significant change, but because of a shift in demand overall away from restaurant food as more people are cooking their own meals at home. In the end, it depends on the business model of the restaurant before the pandemic.

Freshman Zachary Guo’s family owns and operates the restaurant Number One China Buffet here in Carmel. Due to COVID-19, the restaurant closed temporarily. A reopening date had been set to April 7, but that has been pushed back now to April 20.

“While I have been a bit worried about business, the people who worry about it the most are my parents, but me and my family have decided to not worry about business until the situation hopefully ends,” Guo wrote.

Tiffany Zhou co-owns and operates Wild Ginger on 116th, which has also shut down.

“We just stay home doing nothing. But we’re just still thinking about trying to open for takeout,” she said.

Ray Mo
A sign on Wild Ginger on 116th’s door announces the restaurant’s temporary closure. On March 16, Indiana Governor Eric Holcomb announced that all restaurants were to close their dine-in services.

It’s difficult to tell, however, when the end of this crisis will be. A report from the American Enterprise Institute laid out four suggested criteria for the reopening of the country and its businesses. Hospitals should be able to treat all patients requiring hospitalization without resorting to crisis care standards; the state should, at the very least, be able to test everyone showing symptoms; the state should be able to accurately keep track of cases and contacts of those who have contracted the virus; and there has to be a reduction of cases lasting at least 14 days. 

So what does this mean for the future of the restaurant industry? 

Some have said that this could be the end of restaurants as we know them, but this, too, is near impossible to predict. Many larger businesses, such as chain restaurants, have large reserves from which they can draw in times of crisis in order to stay afloat and pay expenses that haven’t stopped coming. Smaller restaurants, like the family-owned Asian restaurants of Carmel, may not have that same kind of fallback. According to the National Restaurant Association, stimulus bills and loans are available to small business owners, but whether that will be enough only time will tell. 

“Smaller, local businesses usually have fewer cash reserves to see them through the crisis, but they are also more adaptable and have closer ties to their communities and customers. Therefore the owners of local restaurants can hustle more and adapt sooner; they can also leverage relationships with communities to try sell takeout or family meals, or to serve the community in some other way,” Fisher said.

Chinese and other Asian restaurants in particular may face an added hardship in this time. Since the very first COVID-19 related closures and deaths, countries all over the world have reported increased incidents in racially-motivated harassment and violence against Chinese people and those who appear to be of East Asian descent; San Francisco State University noted a 50% increase in reported COVID-19 related discrimination.  An article from the New York Times told the story of 26-year-old Yuanyuan Zhu, an immigrant to the United States from China, who was shouted at and spit on as she walked home from the gym on March 9. A People Magazine article from March 17 highlighted a number of racist incidents, including the attack of a Chinese student in Australia who later had undergone expensive facial reconstruction surgery in order to keep from losing his eye. 

Guo said, “Before we decided to close the restaurant, we did not have many customers; however, I feel that is because people want to isolate themselves in order to not catch (the) coronavirus.  However, racial tensions have played a role in our decision to temporarily close the restaurant, and I have heard about many incidents that have happened due to the racism towards Chinese people.” He did not provide more details on those incidents.

“The COVID-19 crisis is what we call a “black swan” event,” Williams said via email. “We know they will happen, but we are never sure when or how they will occur. Even large restaurant chains such as The Cheesecake Factory are struggling, demonstrating just how hard it is to pivot an entire business model in such a short period of time. Many entrepreneurs are taking steps to plan not only for the now, but for the post-COVID-19 environment. While crisis inflicts terrible challenges, they also provide a resetting of industry playing fields, which potentially positions some organizations to be effective in the post-crisis context. What business leaders are considering at this point is: what will the post-COVID-19 situation look like and how can they be positioned to be part of the future in that environment?”

The situation is stressful for many, and no one quite knows what will happen in the next few weeks, or even after the worst of the pandemic is over. In the meantime, officials continue to urge Americans to practice social distancing, and Indiana’s current stay-at-home order, which includes guidelines for the operation of businesses, is currently scheduled to last until April 20 at the earliest.

Read a story about the recent decline in Chinese-owned restaurants here.

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