In the heart of Manhattan’s clothing district, a once-bustling Starbucks stands empty on the corner of Eighth Avenue and 39th Street. Just down the street is a Dos Toros Taqueria that only opened three years ago is now closed. And Wok to Walk, which once served steaming noodles with chicken and vegetables to a busy lunch crowd, is also closed.
While the delta variant of the coronavirus has once again delayed many companies’ plans to bring workers back to offices en masse, workers who have invaded Midtown are discovering that many of their favorite spots for a quick cup of coffee and a muffin in the morning are or Sandwich or salad at lunchtime are gone. A number of those that are open operate at reduced hours or with limited menus.
With the pandemic keeping millions of New York office workers at home last year, restaurants, cafes, clothing stores, and others have struggled to survive.
By the end of 2020, the number of chain stores in Manhattan – from drugstores to clothing stores to restaurants – had fallen by more than 17 percent compared to 2019, according to the Center for an Urban Future, a non-profit research and policy organization.
Across Manhattan, the number of available first floor stores, usually the domain of busy restaurants and clothing stores, has skyrocketed. A quarter of the storefronts on the lower Manhattan ground floor are available for rent, while about a third is available in Herald Square, according to a report from real estate firm Cushman & Wakefield.
Starbucks has permanently closed 44 Manhattan stores since March last year. Pret a Manger only reopened half of the 60 locations in New York City before the pandemic. Numerous delis, independent restaurants, and smaller local chains have gone dark.
“Midtown was clearly the hardest hit part of Manhattan,” said Jeffrey Roseman, an experienced retail real estate agent for Newmark. “When you think of other office-centric areas, be it all of downtown or Flatiron or Hudson Yards, there are many residential areas around those areas that have helped sustain these markets. Midtown is largely a one-trick pony.
“It is primarily offices and hotels that are also affected by the downturn in tourism.”
However, the turbulence has spread further into the city center. Last week, luxury furniture retailer ABC Carpet & Home – whose flagship store was an integral part of the Union Square area – Filed for bankruptcy protection, in part because of “a mass churn of existing and potential customers leaving the city”.
But in a city where the downturn is one opportunity for the other, some restaurant chains are taking advantage of record-low retail rents to set up businesses or expand their presence.
In the second quarter, food and beverage companies signed 23 new leases in Manhattan, leading apparel retailers, 10 of which were signed, according to commercial real estate services company CBRE.
Shake Shack and Popeyes Louisiana Kitchen were among the signatories of new leases this year. One of them was burger chain Sonic, which signed a lease for its first outpost in Manhattan and replaced a Pax Wholesome Foods location in Midtown. Philippines-based chicken shop Jollibee, which has a dedicated following, is planning to open a huge one flagship Times Square restaurant.
However, given the great uncertainty about when employees will be able to fully return to the Midtown offices, some companies are proceeding cautiously. Coffee shop Bluestone Lane had plans to aggressively expand into Manhattan prior to the pandemic and is still considering locations in Midtown. But it’s now focused on opening more residential neighborhoods like Battery Park City, Hudson Yards, and TriBeCa.
“We have deliberately chosen urban residential areas for our new cafes so we don’t have to rely on our locals to return to physical office space, and we are well positioned for the future of hybrid working,” said Nick Stone, Founder and CEO of Bluestone Lane. said in an email statement.
And some restaurant chains that have already reopened in Midtown are changing their strategies to meet what they believe to be changing customer needs in a world post-Covid.
On a weekday, a handful of customers nibbled on salads and sandwiches in Le Pain Quotidien’s Bryant Park. The long communal tables that once dominated the front of the restaurant are gone for the time being, while cooling shelves for a selection of take-away drinks, salads and sandwiches will be expanded over the next year as part of a renovation. A new app for pre-ordering and picking up food will be available in May.
While the new technologies work for some customers, others long for the past.
“We used QR codes to allow diners to look at the menu to limit surface contact, but the majority of our diners want a real menu,” said Stephen Smittle, senior vice president of operations at Le Pain Quotidien. “You want to feel very normal. You want a server. You want to hold a cup of coffee, not a paper cup. “
Le Pain Quotidien fought before the pandemic and requested bankruptcy in May 2020. It was acquired by Aurify Brands, which has since reopened many of the Le Pain Quotidien locations across the city, including several in Midtown.
“We think Midtown New York will return to levels that may not be 100 percent pre-pandemic, but based on the information we’ve gathered, I believe Midtown will return to prominent levels,” said Mr Smittle .
For Starbucks, one of the great lessons from the pandemic was that customers like to order their drinks online and then pick them up quickly from stores or drive-throughs. Starbucks had started before the pandemic opening a pickup location in Pennsylvania Plaza in midtown in late 2019.
As of early 2020, Starbucks has permanently closed 44 of its 235 Manhattan locations. However, mobile pickup areas and additional locations are only added for pickup in many stores. The company anticipates net growth in new stores in Manhattan over the next several years.
Before the pandemic, Starbucks operated three stores around Columbus Circle. It closed them and opened a big restaurant this year. Now runners from Central Park pick up their pre-ordered drinks from a mobile counter and set off again, while other customers stand in line to place their orders and can sit at surrounding tables.
“We wanted to develop the concept and evolve it over time,” said John Culver, president of North America and chief operating officer of Starbucks. “We have seized the opportunity presented by the pandemic and accelerated the transformation of our store portfolio. Consumer behavior during the pandemic has accelerated to levels no one expected. “