A Cautious Dawn Has Broken For Philadelphia's Restaurants

The restaurant industry in Philadelphia is emerging from its long, coronavirus pandemic-worsened winter battered and bruised, but it is emerging nonetheless.

March is normally the month in which business begins to pick up for restaurants as the winter pattern of dead periods punctuated by holidays gives way to warmer weather and more spontaneous dining excursions. But expanded outdoor dining, stimulus checks and vaccinations have combined to make the improvement even more dramatic this year.

In Greater Center City — the boundaries of which Center City District defines as Girard Avenue to the north, Tasker Street to the south and the Delaware River on the east and the Schuylkill River on the west — the number of outdoor diners rose over 20%, from 3,653 in February to 4,406 in mid-March, according to CCD data.

“In March, we saw a dramatic increase in volume,” Mixto manager Francisco Antunez told Bisnow. Mixto is a Latin-Caribbean restaurant in the Washington Square West pocket of Center City. 

Some restaurants were able to sustain themselves through the early months of the pandemic and again through the locked-down winter months with robust takeout and delivery. Others struggled but made it through, while some closed down to save money and have been reopening over the past month. But at least 64 restaurants across the city closed permanently since last March.

The excitement over the reopening of businesses in Philadelphia, as gatherings were permitted in greater numbers and restaurants with approved ventilation systems were allowed to open indoor dining to 50% capacity, may have led to a bit of overexuberance. Coronavirus case numbers in Philadelphia have risen significantly since mid-March, and if they continue to do so before a critical mass of the population can get vaccinated, protocols could once again be tightened.

“Most people get most frustrated not when things are the worst but when things are starting to improve and they don’t improve quickly enough,” Center City District CEO Paul Levy said. “We’re obviously at this transitional point that hasn’t 100% taken hold yet.”

A key accelerant in the recovery process for Center City restaurants will be the return of workers to the office. In February, pedestrian traffic was still down 75% when compared to February 2020, the last full month before pandemic restrictions were imposed, CCD reports. Though Pennsylvania began allowing office work at 75% capacity starting April 1, Philadelphia still mandates all nonessential personnel to work remotely.

“It’s not hard to look forward four or six weeks and be optimistic,” Levy said. “The challenge is right now.”

As more scientific data has supported the safety of outdoor dining without enclosures, another wave of infections and crackdowns on indoor capacity would be met with renewed frustration but would not be the same existential crisis that it was in the winter months, multiple restaurant managers told Bisnow.

In addition to the increase in business, more programs have launched in the past few weeks to provide grants and forgivable loans to restaurants, from the newest federal stimulus package to programs offered by the city of Philadelphia and the Commonwealth of Pennsylvania. The city has already given out $12M in grants to 900 businesses, 80% of which were restaurants.

In addition to a new, more targeted round of the Paycheck Protection Program, $28.6B in federal dollars have been allocated to individual restaurants across the country. The Pennsylvania COVID-19 Hospitality Industry Recovery Plan adds another $145M from the commonwealth, of which Philadelphia will receive $17M for grants between $5K and $50K. No restaurant managers would comment to Bisnow on whether their establishments had received any financial assistance.

“Now restaurants are starting to get a lot more help, which is good,” said Fatima, a manager at Northern Liberties restaurant El Camino Real.

Among the most devastating parts of the past year’s lockdown measures was the widespread loss of jobs in the hospitality industry. Even restaurants that maintained takeout businesses furloughed or laid off servers because they didn’t have enough tables to go around. By the beginning of March, retail employment in the city was above pre-pandemic levels, but that has been due to hiring surges in grocery stores and big-box retail, Levy said. That means a lot of the potential pool of applicants have already moved on.

“Right now, we are short-staffed,” Fatima said. “There’s just not enough applicants; that’s the main issue.”

Once indoor dining expands more fully, hiring will need to ramp up even more, although serving is, by its nature, a seasonal job. 

“It’s a business with a great amount of turnover,” Levy said. “So that worries me less [than other factors]. The restaurant industry is skilled, but it’s more built around friendliness and quality of service.”

As restaurants try to keep overhead as low as possible and outdoor dining remains largely weather-dependent, the jobs will likely return in fits and starts.

“That’s just a part of the industry altogether — you get really, really busy, then slow,” Fatima said. “It’s just a lot harder now.”