Restaurants are ‘still in recovery mode,’ says Seated co-founder

Seated co-founder and executive chairman Bo Peabody joins Yahoo Finance Live to discuss the state of the restaurant industry as COVID-19 mandates begin to ease.

Video transcript

AKIKO FUJITA: Welcome to Yahoo Finance Live. It’s time for our “America Back in Business” series sponsored by Straight Talk Wireless. Today we check the health of restaurants. We received a recent report from the National Restaurant Association which found that only seven states have seen restaurant employment return to pre-pandemic levels. And for more on the recovery and where things stand in 2022, let’s bring in Bo Peabody. He is a seated co-founder and executive chairman. We also have Yahoo Finance’s Brooke DiPalma joining the conversation. Bo, it’s always good to have you on the show. I’ll tell you anecdotally that I’ve been out in restaurants, more and more people are feeling a little more comfortable and not wearing those masks because a lot of mandates have been lifted. How has this boosted restaurants? BO PEABODY: It definitely helped. I think we’re still in that period where there are just habits that were there when you went out and how often you go out that don’t come back as quickly as we all hoped. I think it has a lot to do with returning to work. And a lot of that has to do with the fact that people aren’t used to visiting restaurants anymore. And so, even though you see full restaurants here and there, the overall numbers are still in recovery mode. BROOKE DIPALMA: And, Bo, earlier this year Seated launched a free tool for restaurants. This is called the restaurant occupancy calculator. It allows restaurants to visualize their occupancy rate. Tell us how exactly this tool works, what trends they’re noticing, and what plans they’re putting in place to fill those seats. BO PEABODY: It’s my personal mission to get every restaurant owner and operator to focus on their occupancy. This is the most important thing for any restaurant. I have owned restaurants for 25 years. That’s all I focus my team on, how many seats do we have and how many of them do we fill per day? What the seated restaurant occupancy calculator lets you enter some data based on your day, day of the week, time of day – and it will tell you how many of your seats you actually occupy. And every one you don’t fill is a huge profit opportunity, right? Because your fixed costs are your fixed costs. So every seat you occupy that would otherwise have gone empty adds directly to your bottom line. BRIAN CHEUNG: Hey, Bo, it’s Brian Cheung here. You know, what’s so interesting about the measures for restaurants is that the occupancy potential is very different because some restaurants, especially in New York, might actually have more capacity now due to the possibility of putting tables outside. So these kinds of measurements change, apparently, depending on the season. And we know it is also limited by the number of workers they have. And New York City still hasn’t returned to pre-pandemic employment levels in the industry. So how do you incorporate these kinds of elements unique to restore operations into the metrics you look at? BO PEABODY: In a way, in New York, and I think even in other cities like what we see as Boston, we’re in a golden era. We have – many restaurants have been able to increase their capacity with outdoor seating without increasing their rent. Consumers have become accustomed to a little more self-service. So you need fewer people to serve the food. And so you know, your fixed costs have actually, as a percentage, gone down. And so it’s never been more important than understanding, how do I, when things get busy – we’ve seen that Sunday brunch, by the way, is a much busier time than it used to be. How can I fill as many seats as possible during these times with my extra capacity for which I am not paying rent? BROOKE DIPALMA: Bo, I want to do a little bigger picture here. Across the country, you know, restaurants keep trying to come back. And most recently, New York Congressman Tom Reed, among 150 other congressmen, wrote a letter to Speaker Pelosi and Chef McCarthy urging them to replenish the Restaurant Revitalization Fund. What would be the importance of this influx of capital in the return of the restoration? BO PEABODY: Well, I’m split on that. Of course, more money for the industry is good. But profiting from that money is a complicated thing that many operators are simply not equipped to do from a financial, accounting and administrative point of view. So I think if they’re going to do that, they need to make it easier for smallholders to access that capital– either by providing help in filling out the forms and partnering with the banks to make it happen or just make it easier if they have to do it themselves. So I agree, but I would like it to go to operators who have a little less infrastructure. Most of those who had a lot of infrastructure, they were able to take advantage of the first round. BRIAN CHEUNG: All right, Bo Peabody, seated co-founder and executive chairman alongside Brooke DiPalma of Yahoo Finance, thank you so much for bringing us this conversation.

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