After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

On June 29 the dim sum bastion Jing Fong reopened in Manhattan’s Chinatown for take out and delivery. A handful of folding tables have been set up outside for people who want to eat pork dumplings hot from the steamer. But because the restaurant shares Elizabeth Street with the 5th Police Precinct, the road can’t be blocked with waiter service tables.

It’s a stark contrast to the activity that took place a few months ago in the 800-seat multilevel space, with 20 dim sum carts roaming the floor on a typical Sunday. “On a busy day, we would seat 2,500 to 3,000. Just for brunch,” says marketing manager Claudia Leo. The restaurant prepped over 1,000 pork buns a day. “I doubt we’ll be doing that anytime soon,” she says.

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

While New York’s Chinatown is just beginning its comeback, Chinese restaurants outside the neighborhood have rebounded in a notable way. Jing Fong’s Upper West Side location reopened for take out and delivery on June 2. Two weeks later, on a rainy night, the restaurant did 100% of the business they’d done when the 70-seat dining area was open; on average it’s been about 55%. “The locals on the Upper West Side spread the word in their buildings that we were reopen—it was huge,” says Leo.

The trend is taking place across the country. Since reaching a peak closure rate of 60% on April 11, Chinese restaurants have reopened faster than any other category of independent restaurant, according to the small-business data company Womply. As of June 20, just 15% of Chinese establishments weren’t doing business, vs. 20% of other types of independent restaurants.

In New York the contrast has been even sharper. On March 30, 94% of Chinese restaurants were closed, compared with 61% of the city’s other restaurants. By June 20, the number of closures had fallen to 10%.

Likewise, in the last week of December, Yelp’s page views for Chinese restaurants accounted for 8.7% of traffic for all restaurants in Manhattan. By March 2, Chinese restaurants only made up 6.2% of page views across all restaurants in the city—the lowest percentage since the beginning of 2018. By the week of May 11, Chinese restaurants accounted for 10.3% of restaurant page views, according to the company’s data.

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

Racist Reaction

Early on, many people blamed racism for the high rate of Chinese restaurant closures.

“I think the initial xenophobia and frankly racist reaction to Covid, Chinatown was the first neighborhood to be impacted as far back as early February,” says Malcolm Yeung, executive director of San Francisco Chinatown Community Development Center. (President Trump continues to stoke that reaction, having referred to the novel coronavirus as the “kung flu” as recently as June 24.)

San Francisco is the oldest Chinatown in North America. There were 150 restaurants in the neighborhood pre-pandemic; only about 70 have reopened.

In New York, Leo says, “We got racist calls: Can I get a side of corona with that?” 

Consequently, awareness campaigns such as #TakeOutHate have helped highlight racism issues and encouraged people to support their local Asian restaurants. 

But restaurateurs say that the decision to close was invariably based on in-house safety concerns and not customer fall-off. Many Chinese places are owned and operated by multigenerational families concerned about the danger to older family members. “We decided to close our restaurants because almost all our chefs are in a high-risk age group, which is 50 and above,” says Leo.

“The Chinese restaurant community knew how serious the virus is—we saw it first hand with SARS,”says Lydia Chang, director of business development at the mid-Atlantic-based Peter Chang Restaurant Group. “Our staff is mostly Chinese and was watching the news back home. They tend to live with three generations. They weren’t taking chances.”

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

New Business Models

At Peter Chang restaurants, the strongest demand among their 12 spots has been at the most neighborhood-focused location, in Arlington, Va. The place has averaged 80% to 90% of their precoronavirus business via carry out, according to Chang. In fact, sales revenue was 10% higher in May than in May 2019. “It’s surprising to me,” she says.

Chang has also created new models such as “community catering menus” of 100 to 150 orders that are purchased by groups and delivered to a drop-off location for families who are tired of their own cooking.

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

Yong Zhao, co-founder of Junzi Kitchen, the modern fast-casual Chinese minichain in New York and New Haven, Conn., believes that many places closed too aggressively. “People were scared. They closed more than they should have,” he says. Now Chinese restaurants benefit from being the most delivery-centric of cuisines and one with many options for ordering. “For Chinese restaurants, there are lots of different Asian-food-focused platforms besides Doordash and UberEats, like Hungry Panda and Chowbus, which will deliver food from Flushing to Manhattan. Chinese restaurants have more plays in their playbook.”

Zhao has seen sales rebound slightly, from less than 20% during the first week of the shutdown to 40% now. He also credits new programs such as family meal kits.

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

Chowbus Chief Executive Officer Linxin Wen is developing a feature to facilitate safe service as more Chinese dining rooms reopen.

“We’re building a contactless dine-in feature,” Wen says. “Customers preorder and schedule a time, and a waiter will bring the food. We started planning two weeks ago when a Dong Ting Chun in Seattle told us they were getting ready to reopen but it was hard for them to do takeout. We came up with a solution.”

After Covid Backlash, U.S. Neighborhoods Rally Behind Chinese Restaurants

Chinese restaurants in the U.S. still have a long way to go, even as their takeout business grows. Even as recently as the week ending on June 8, the number of seated diners at Chinese restaurants was down 60% from the same week a year earlier, according to data from OpenTable.

In San Francisco’s Chinatown, China Live has established itself as a high-concept spot with multiple dining spaces and bars, when it’s in action.  Co-founders Cindy Wong-Chen and her husband, George Chen, claim its the city’s highest-grossing restaurant; their 2019 revenue was $20 million. The pandemic has been tough, but they’ve seen demand for pantry staples with a Chinese twist—lychee jams, organic extra virgin tea oil—come from as far as Spain. They’ve maintained deliveries, though they anticipate a challenging future.

“I don't believe that sales will come back in a traditional way, that is between four walls,” says Wong-Chen. “Seventy percent of our business is from outside the Bay Area, and people aren't traveling as much.”

But Junzi’s Zhao is cautiously optimistic. “We aren’t even in Phase 3 yet. We'll come back to 70% then, I’m confident about that. And it’s encouraged us to work on new programs. We just teamed up with the Senegalese chef Pierre Thiam for a menu mashup. We’re all immigrants, we are all in this together.”

©2020 Bloomberg L.P.

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