Many remaining Massachusetts restaurants are operating with skeleton crews as they attempt to match operating costs with sharply diminished revenues, and shuttered non-essential retailers are waiting for word on whether they can resume limited operations if Gov. Charlie Baker’s stay-at-home advisory expires May 4. 

Government stimulus programs so far have missed the mark, retail industry groups say, leaving small merchants to build their own life rafts and search for safe harbors in the COVID-19 economic crisis. 

“I probably did more business on one Saturday night of normal service than a whole month of takeout and delivery and it’s strangling me, to say the least,” said Michael Aldi, owner of Dryft restaurant at the 500 Ocean Ave. apartment complex on Revere Beach. 

Things would be even worse without the built-in clientele from the 305 apartment units upstairs, said Aldi, whose business has functioned as a sort of provisional room service during the stay-at-home advisory. 

Revenues Down 60 Percent 

Retail groups are lobbying on behalf of state or federal legislation providing business interruption insurance coverage, similar to that passed after the 9/11 attacks, to cushion members’ finances. In the meantime, The Retailers Association of Massachusetts is monitoring the potential timeline for relaxing of non-essential business shutdowns. 

A member survey completed last week found that 70 percent of respondents favored reopening on May 4, with guidelines for 6-foot social distancing and occupancy limits reduced to 40 percent as in other countries whose own epidemics have ebbed. Overall, members’ revenues appear to be down approximately 60 percent, RAM President Jon Hurst said. 

Retail revenues appear to be down approximately 60 percent in Massachusetts due to COVID-19 restrictions, and sales are expected to remain low when non-essential businesses reopen.

“We’re looking for some step-by-step measures for small businesses to start to serve their customers, even if the doors are still locked,” Hurst said. 

Small retailers received some protection when Baker signed legislation last week temporarily halting residential and commercial evictions, but even that measure has its limits. Businesses that are publicly traded, have more than 150 employees or operate in other states are not protected, Hurst noted. 

“There are a lot of mom-and-pop restaurants that have locations on the North Shore and New Hampshire, or in Fall River but also Rhode Island,” he said. “That just ignores some realities of New England, so that was a disappointment. But at least it sends a message and creates a little more leverage [with landlords].” 

Flexible Strategies Buy Time 

In Hudson, the owners of a trio of popular downtown establishments pivoted to take-out items ranging from ice cream to make-your-own-cocktail kits, but still are pulling in just half of their typical revenues. 

Michael Kasseris, an owner of Rail Trail Flatbread Co., New City Microcreamery and Less Than Greater Than speakeasy, compared the transition to starting a new business from scratch. Entryways and traffic patterns had to be redesigned to accommodate social distancing, and point-of-sale and ordering systems were modified to reflect the abbreviated menu and business model. The company has rehired about 40 staff between the three locations. 

“We’re in constant communication with all of our landlords, telling them where we’re at every day and playing it by ear. They are very supportive and we’re trying to make it work, but all options are on the table,” Kasseris said. 

Like many restaurant operators, Dryft’s Aldi has pared his menu to high-volume items like pizza that translate well to off-site consumption, while jettisoning the raw bar and some seafood items. The abbreviated menu has average prices of $15, roughly half the restaurant’s norm before Massachusetts banned indoor dining last month. About eight of the original 50 employees remain, some dedicated to a new delivery service to nearby neighborhoods. 

Boston-based Redgate, developer of 500 Ocean Ave., is supporting Dryft with promotions tied to tenant move-ins, said Kyle Warwick, a Redgate principal. The restaurant does not pay base rent during the complex’s lease-up period which began in November, and received a substantial tenant allowance for buildout, Warwick noted. The availability of patio space originally approved for 200 seats should be a benefit in the outdoor dining season. But the makeshift new business model remains precarious, he acknowledged. 

Steve Adams

“Going to a takeout model is not ideal for most restaurants,” Warwick said. “It’s not their business plan, and they are trying to modify it on the run and it’s hard to make money.” 

Landlord-tenant agreements with shared risk may become more common in the post-COVID era, RAM’s Hurst said. 

“There may need to be some leases renegotiated based more upon sales. Most small businesses aren’t in that world,” he said. “In order to spread the pain, it seems like everyone should have some skin in the game including the landlords and banks.”