Kevin Burke

From the Union Oyster House to Mike’s Pastry to Cheers, Boston is home to some of the country’s most historically significant and well-known food establishments. And the city’s eclectic restaurant scene has long been one of its cultural cornerstones. However, while many of the region’s residents have supported local restaurants over the last two years, the omicron variant of the coronavirus remains a threat to the long-term recovery of Greater Boston’s many restaurants, forcing owners to implement novel and unconventional methods in order to stay open.  

Today, thousands of area restaurants remain closed following the lockdowns which began in the early days of the pandemic. And new rules are going into effect this month requiring proof of vaccination to eat at restaurants in Boston and several nearby communities, the latest effort to contain the pandemic as the restaurant community seeks to balance serious public health concerns with the need to serve customers and keep their staffs employed. 

Clearly, restaurant owners must adapt to make it through the latest wave of COVID. Research from Citizens shows that certain segments of the industry—primarily fine and casual dining—suffered during the previous lockdowns despite attempts to provide carryout services, while “fast food” posted gains due to their business models already being workable for the world of social distancing. 

Restaurants that offered a meaningful delivery and carry-out experience prior to COVID-19’s emergence were able to post sales growth over the last two years. By the fourth quarter of 2020, for the first time since the start of the pandemic, the quick service restaurant industry generated growth, primarily due to the accessibility and convenience of their drive-throughs. This was demonstrated by many burger restaurants, which increased sales by 8.5 percent and already largely featured delivery, drive-throughs and carry-out as part of their business model before the pandemic began. 

Fine Dining Took Hit in 2021 

Final 2021 numbers are not yet available, but in 2020, the industry’s chicken segment declined 2.2 percent overall, offset by some strong quarters for KFC, which posted sales increases. Pizza restaurants posted overall growth in 2020.  

All other segments of the restaurant industry reported declines during the 2020 lockdowns. Fast casual restaurants reported mixed results, bouncing back somewhat toward the end of 2020.  

Unsurprisingly, family dining, casual dining and fine dining suffered the greatest declines in sales. While many of these restaurants pivoted to offering pick-up or takeout meals, it has been a struggle for many owners and their staffs to adjust their business models and weather the loss of income in an industry that can involve thin financial margins even in the best of situations.  

Still, there is a silver lining as the industry continues to innovate and widespread availability of vaccines and booster shots suggests that Boston restaurant owners will not see a return of the early, dark days of the pandemic.  

With the pandemic approaching its two-year anniversary, the impact on local businesses across Greater Boston cannot be overstated. Over the past two years, Citizens has worked to bring assistance to numerous clients, ensuring focus on critical day-to-day decisions, and helping them adjust their business models. With a shared sense of urgency and teamwork, Citizens and its partners have collaborated amid the chaos, triaging an extremely delicate situation to ensure liquidity for many local businesses.  

Many Boston small businesses have shown great resilience and will continue to need to be agile, and in a strong cash position, during these volatile economic times. And many Boston restaurant owners – as well as retail landlords and commercial brokers – have shown tremendous creativity to make it through this tumultuous period, suggesting COVID-19 will eventually become a footnote in the history of the city’s well-established restaurant scene.   

Kevin Burke is managing director of Trinity Capital, a division of Citizens Capital Markets.