These cancellations, especially at smaller scale, will dampen catering. As will offices asking employees to work from home. There’s also the effect on business dining to mull over. According to Dinova, it’s a $77 billion industry in the U.S., where more than 20 percent of diners report average checks of $61-plus when dining on the company’s dime.
Additionally, this doesn’t factor in the likelihood people will decide to batten down the hatches and stay at home (self-quarantines). The effect will be more pronounced in large gathering areas, like food courts, food halls, and crowded restaurant spaces that pack people in.
What this could do to employees is a different issue altogether as well. Darden announced this week it was now providing paid sick leave to hourly employees. The COVID-19 outbreak accelerated a program, Darden said, that been in talks for a while. Current workers will gain one hour of paid sick leave for every 30 hours worked, starting with the past 26 weeks. New employees can build sick leave as soon as they start, but cannot use the benefit until after 90 days of employment. The pay rate is based on the employee’s 13-week average.
McDonald’s also said Tuesday that it will pay hourly employees at company-owned units who have to quarantine for 14 days. That does not include franchises, which accounts for 95 percent of stores in the U.S. The chain said many of its locations have policies in place to offer paid leave. Corporate store employees earn up to five days of paid time off each year.
Darden and McDonald's moves aside, data shows only 25 percent of workers in the industry have paid sick leave. That means scores of employees who potentially contract the virus might need to look for other work to pay the bills, leading to increased turnover in an industry already plagued by triple-digit figures. On the back end, operators’ struggles to fully staff units—a significant hurdle already—will only heighten.
Closures might play a role, too. A Starbucks in downtown Seattle shuttered recently after an employee tested positive. The World-Herald in Omaha, Nebraska, reported that Council Bluffs’ first confirmed case was a restaurant worker, from Panera Bread. The restaurant closed for a deep cleaning, which took a few days.
To put in plainly, there are simply a lot of factors and unknowns, and you’re seeing that uncertainty drag public restaurant stocks in recent days. And it’s not going to ease in coming weeks.
Black Box said March could prove tough for restaurant employees in particular, especially if traffic experiences a bigger hit due to fears of the coronavirus. This isn’t welcomed news considering rolling 12-month turnover increased in January for both non-management and restaurant positions yet again.