Market Overview

Checking In On Restaurants Amid The Coronavirus Lockdown: Cousins Subs

Checking In On Restaurants Amid The Coronavirus Lockdown: Cousins Subs

Restaurants in a handful of states reopened their doors with limited seating in recent days. Benzinga checked in with a handful of restaurants of different sizes to see how they are faring so far at a time when the coronavirus pandemic remains a major overhang for restaurants. 

This is part one.

Cousins Subs is a regional sandwich chain with dozens of locations across Wisconsin, Illinois and Indiana. Jason Westhoff, the chain's president, answered questions from Benzinga about the state of the industry.

Consumer Sentiment

As restaurants across the country start to open, most owners and operators will have a positive and optimistic outlook, Westhoff said.

So far, Cousins Subs has seen an uptick in guest complaints that came with increased traffic, but the majority of consumers "have been in this with us and our employees" since the beginning of the pandemic, he said. 

"I expect to enjoy a new normal this summer and Cousins Subs will be prepared for any potential additional returns to prior business practices in the fall." 

Many consumers are also sad knowing their favorite local spot or spots will never be the same again or close for good, Westhoff said, adding that fewer options is better than not having a chance to dine out at all.

Sales at Cousins have fallen 28%, and traffic is down even more, the exec said. 

"It will take a lot of effort to overcome the fear that has been caused by the pandemic. I do expect traffic to return to normal levels. However, it will be impacted by the fewer restaurant choices for guests as some local family-owned businesses will not be financially sound to reopen."

Restaurant Closures

CNBC's Jim Cramer said up to 30% of all restaurants and bars will close their doors permanently. Westhoff said this outlook "could definitely be possible" and added that 12% to 20% of restaurants alone could close. Bars have already lost out on one of the busiest days of the year in St. Patrick's Day and on warmer than usual spring months, he said. 

"If states continue to move forward with extending closures as they have done in Illinois, many bars and restaurants cannot expect to stay in business when their services are closed for over three months."  

Importance Of Delivery

Throughout the quarantine period, Cousins Subs saw its delivery business triple in size.

While delivery remains a "great option for convenience," the momentum is likely to slow down, Westhoff said, adding that many customers will be excited to return to dining rooms after not being able to do so for weeks.

Role Of Small Chains

Westhoff also said he believes larger publicly listed restaurants will look to acquire private chains.

Cousins Sub has been around for a long time and boasts loyal clients who demand superior products versus national chains, he said. 

Cousins Sub differentiates itself from the majority of its nationwide competitors by offering a grilled product line and made-to-order sides, including Wisconsin Cheese Curds and shakes, Westhoff said. 

"To me, I think it's important to be a regional chain with nearly 50 years of loyal guests than a chain trying to compete on price." 

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