Outdoor Dining's Back — But Local Restaurants Are Hanging by a Thread

Konan Pi runs Hom Korean Kitchen, a casual Korean restaurant with three locations in Santa Cruz, San Jose and San Francisco. He received a Paycheck Protection Program (PPP) loan in late April, but he is burning through that money to keep his restaurants afloat.

"$10,000 really doesn't go far," Pi said. "I think we'll probably use the rest here in [June]. I don't see it lasting much longer."

The restaurant industry has suffered heavily under the pandemic's shelter-in-place restrictions, and even as the state slowly reopens, restaurants like Hom Korean Kitchen may not be able to survive long enough to bounce back.

Already, Pi is preparing to permanently close his weakest location in Santa Cruz by the end of June because the restaurant can't make enough money.

"We had to go into debt to get through the winter," Pi said. "We were really hoping for a summer that would help us push forward." The summer season is typically a strong one for the chain, but it's not clear how many people will return to eating at restaurants even after local guidelines allow them to do so.

On June 5, Santa Clara County started allowing restaurants to offer outdoor dining so customers can socially distance while sitting down for a meal, and San Francisco will begin allowing outdoor dining this weekend. Pi opened the patio of his San Jose location, but only a few customers are coming by each day.

He believes Hom Korean Kitchen also wouldn't last if there were a second shutdown. He's put everything he has into his restaurant over the last five years.

"It's all kind of at risk of just being washed down," Pi said. "And the thing is, I feel like I didn't do anything wrong!"

Pi doesn't see how foot traffic will ever be the same again in downtown San Jose or mid-market San Francisco. And even if people eventually return, it won't be soon enough for him and his restaurants.

As he struggles to keep his other restaurants afloat, Pi watches in exasperation as some national chains thrive, like Chipotle, which reported an increase in March sales of about 100% compared to the same time last year.

"How can we lose 70% of our business but they actually not only retain it but they grow during this time?" Pi said.

Delivery Apps Not Much Help

Pi also feels he is competing for customers' attention on online food delivery services like Grubhub and DoorDash.  So, he looked into working with companies like Olo or Chowhound that could create a standalone mobile ordering app for his restaurant chain. But that would cost Pi $2,000 per month, which is unfeasible right now.

"I'm a bit paralyzed by the fear if I don't move and adapt and change, then we're going to slowly waste away." Pi said. "If we take a risk and put money into developing an app, that could either hasten our demise or save us."

Pi is also contemplating turning his restaurant into a ghost kitchen, where he would loan his space to other restaurants to prepare meals for delivery.

Andrew Freeman, a publicist for the Golden Gate Restaurant Association, said that concept is just two years old, but it has been attracting new converts during the pandemic.

"You can have multiple brands going at the same time and it's all delivery. The end user doesn't know where it's coming from," Freeman said.

But Freeman cautions restaurateurs like Pi from making rash decisions they could wind up regretting two months from now. "You have to really be careful because everything is changing so fast," he said.

Pi is hardly alone in his struggle to keep his restaurant alive during the pandemic. Brandon Jew, the chef behind Michelin-star restaurant Mister Jiu's in San Francisco, said he's also hanging on by a thread.

Jew said he believes few independently owned restaurants have a big enough safety net to protect them from the financial repercussions of shelter-in-place orders.

He is convinced another wave of the coronavirus could kill Mister Jiu's, so he's reopening his restaurant slowly and cautiously.

"If I have this operation that I'm trying to ramp up and then I have to just shut it down again, we wouldn't last," Jew said.

"The fight to get the restaurant back is to get our employees back and to give them a job again and to get the restaurant back to where it was," Jew said. "And I don't think that's realistic."

Beyond his desire to keep his business going, Jew said he also wants that visceral confirmation he gets watching a room full of people happily eating the food that he made, with a team of people he works with.

Editor's note: KQED is among the local businesses and media organizations that have received a PPP loan. This helps us continue to provide essential information and service to our audiences during the COVID-19 pandemic.