Chef Tom Colicchio thinks that the current coronavirus crisis may see as many as 75% of restaurants close and not open their doors again.
Not to sound too pessimistic, but that’s the view of Top Chef Co-host Tom Colicchio, who himself had to take the very difficult decision to close all of his restaurants and lay off some 300 employees.
In an interview with Daily Beast Colicchio explained that the reason the restaurant industry will be so badly affected is that they’re not set up to be able to survive this type of crisis. They operate on razor-thin margins and even the so-called celebrity chefs are only surviving from month to month.
“I think if we’re lucky 25% of the restaurants will stay open,” he told the Daily Beast.
“We don’t have cash reserves. The money that we make today, if we were open, goes to pay bills from 45 days ago. Margins are razor-thin. This is not the business that people think it is."
Colicchio compared the precarious state of restaurants’ finances to the retail sector who operate with bigger margins and are therefore better able to weather a storm in a crisis like this.
“Retail profits are 30%,” he said. “Our profits, if we make profits, a good year is 8%. It used to be better, but rents are higher, labour’s higher, everything’s higher. Quite frankly, if we were operating the way we should operate, restaurant prices should be 20 or 30% higher. But we can’t do that because people say it’s too expensive.
"And we’re seeing that it’s exposing our system. Something like this is exposing our health care system, it’s exposing the way big business works. It’s exposing the inequities that everyone lives with. So yeah, I’m a ‘celebrity chef’ who’s on TV. But do you really think that Top Chef pays me like an actor is paid? I do OK and I’m not complaining, but this is not what people think it is. It’s a lot of smoke and mirrors.”
In unprecedented crisis comes unprecedented opportunity to rebuild social structures. Colicchio is not alone in hoping that when this all blows over, America and the rest of the world will take the chance to fix much that has become dysfunctional about our society.
“Everyone’s health care is tied to employment. So if you’re not working, then what happens? Now here’s the silver lining for me: If we get this right, we can rebuild this entire country. This is why I say this is our generation’s World War II moment. And what happened after that war? Huge public works projects. We built this country. That’s what we’re going to need. So you have to have someone with vision now. Because you have to put people to work. This is about something big.”