As more restaurants fall to pandemic pressures, others embrace new delivery and ghost kitchen models

U.S. restaurants continue to face closures and bankruptcies as the COVID-19 pandemic makes a major impact on foodservice operators’ profitability.

Houston, Texas-based Luby’s is the latest financial victim of the coronavirus crisis, reporting in a press release that it has implemented a plan of liquidation and dissolution to dissolve the company.

The operator of 76 Luby’s Cafeteria restaurants – which focus heavily on seafood dishes – and 34 Fuddrucker’s locations said it plans to sell its restaurants, Culinary Contract Services business, as well as its real estate.

"We believe that moving forward with a plan of liquidation will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the company should a compelling offer that delivers superior value be made,” Luby’s Chief Executive Officer and President Christopher J. Pappas said. “The plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward."

Chicago, Illinois-based Boka Restaurant Group has also filed a notice that it plans to permanently lay off 516 employees later in September due to COVID-19 impacts, Restaurant Business reported. Boka operates 20 restaurants, primarily upscale eateries and some focused on seafood, including some headed up by celebrity chef Stephanie Izard. Boka’s GT Fish & Oyster, Girl & the Goat, Swift & Sons, GT Prime, and Little Goat are among those impacted by the layoffs.

Several seafood restaurant chains, including McCormick & Schmick’s and Oceanaire Seafood Room, have also had to close some of their locations. Most recently, Boston, Massachusetts-based Legal Sea Foods permanently closed two of its 33 restaurants, and said it may be forced to close others.

Houston, Texas-based Pappas Restaurants group is permanently closing five of its locations in Houston, including Pappas Seafood House, Pappadeaux Seafood Kitchen, and Pappas Shrimp Shack, Preview reported.

Carlsbad, California-based Rubio’s Coastal Grill has also been forced to close 12 of its approximately 170 locations.

In fact, more than one million small businesses, including restaurants, have permanently closed since February, according to Small Business Majority, which called on Congress to do more to help restaurant operators and other businesses.

"One in four businesses in our network believe they will not survive past the next three months without additional relief, and a number of others are considering bankruptcy,” Small Business Majority Founder and Chief Executive Officer John Arensmeyer said in a press release. “Each day that Congress fails to come to a bipartisan solution, is another day closer to some businesses breaking point.”

Despite the grim news, restaurants are doing everything they can to up their sales, including putting a heavy focus on takeout and delivery options, along with new direct-to-consumer delivery services.

This week, Daniel Boulud Kitchen, the delivery concept designed to bring classic culinary dishes to the home via a partnership with e-commerce Goldbelly, said it is expanding nationwide.

Helmed by celebrity chef Daniel Boulud, who founded New York, New York-based The Dinex Group, the delivery service launched in May 2020 in New York City, Westchester, and the Hamptons.

“With much of the country still at home and unable to travel, we want Daniel Boulud Kitchen to be accessible to people everywhere to enjoy a celebratory meal at home. Now with Goldbelly, these classic French dishes will be available nationwide,” Boulud said in a press release.

Specially curated meal kits include a Bouillabaisse Kit for four people, priced at USD 379 (EUR 321) each, and a Red Wine Braised Beef Short Ribs Kit for four.

Similarly, TGI Friday’s recently rolled out its Butcher Box concept, offering to ship kits with raw meat, seafood, and sides directly to consumers’ homes.

Offering their kitchens up as ghost kitchens for other restaurants and delivery services is another way restaurants are looking to grow revenue. For example, a Ruby Tuesday in Lebanon, Pennsylvania, is acting as a ghost kitchen for The Captain’s Boil, a seafood franchise based in Canada, LebTown reported.

Photo courtesy of The Dinex Group


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