Momin Mohiby’s gyro cart sits in the shadow of the Comcast Center, parked at the corner of 17th and Arch Streets. It’s usually a prime location for lunch hour in Philadelphia, with thousands of workers walking in and out of skyscrapers.
But these are not usual times. Last week, Mohiby diced lamb on a desolate Center City street. His sales are down almost 90% since he reopened June 8 after shutting down in mid-March, he said. Although outdoor dining and retail recently restarted in Philadelphia, most white-collar office workers are still stuck at home, crushing Mohiby’s business.
“The reason why I came out is because I heard the city is partially reopening,” he said. “If it’s like this, it would be better for us to be closed.”
About three months after the city largely shut down because of the coronavirus pandemic, Philadelphia this week is set to enter a modified “green” phase of Pennsylvania Gov. Tom Wolf’s three-phase reopening plan. But the city’s largest employers aren’t rushing back to the office. They plan to continue remote work for a while, disrupting already struggling downtown businesses.
Restaurants and retailers that relied on foot traffic from office workers could be forced to pivot or perish. The economic impact of remote work could be long-lasting, as companies realize they don’t need all employees in the office to get the job done.
Many stores are waiting for companies to make final decisions about remote work before making their own plans, said Subodha Kumar, a marketing and supply-chain management professor at Temple’s Fox School of Business. Once companies have firm plans, stores will move to suburban and residential areas, downsize their downtown footprints, or close altogether, he said. He noted that Starbucks plans to shut down 400 stores.
“After the pandemic, some of the locations are not going to even come back,” Kumar said of downtown stores. “They are a little watchful, and they don’t do knee-jerk reactions, but they are realizing that this [remote work] is going to stay.”
At Comcast, the vast majority of its 9,000 workers at headquarters won’t return until after Sept. 30, at the earliest, according to an internal email. Thomas Jefferson University, which has 7,000 people working from home in its clinical, university, and corporate departments, said it will encourage remote work when the city enters the green phase. Independence Blue Cross, with 4,500 employees working from home, said it will continue telework in the green phase, too.
They’re hardly alone in taking a slow approach. A quarter of firms surveyed by S&P Global Market Intelligence said they will wait a month or more to return to the office. And 24% more have no timeline. Almost 19% plan to come back as soon as local regulations allow.
Big companies across the country have already announced long-term or permanent remote work plans. Tech giants Facebook and Twitter have said that some of their employees will never come back to the office. Amazon told staff they can work from home until at least October. Nationwide Insurance is closing some offices forever and having those workers telecommute permanently.
To maintain social distancing, companies won’t staff offices at full capacity even when they do reopen. Mark Silow, chairman of the Fox Rothschild law firm, said he’s aiming to bring workers back to the Center City office starting after July Fourth, but expects to have about half his 200-member staff there at first. He’d eventually like them all to come back on some sort of regular basis, but said remote work has gone “remarkably well” and could lead to lasting change.
“I do think it certainly opened our eyes to the fact that not every lawyer needs to be in their office every minute of every day,” he said.
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That shift has forced lunch spots to pivot to online ordering, delivery, and other ways to meet customers where they’re working: at home.
Baology, a Taiwanese street food spot in Center City, recently launched a meal prep service that delivers a week’s supply of food to the city and suburbs, owner Judy Ni said.
She handles grocery shopping, ensures that ingredients are well-sourced, and packages meals that can be made with minimal cooking. That can save customers’ time to focus on work or child care, she said.
“The question is how do we meet them where they are and adjust to their needs?” Ni said of corporate workers. “Because we are a service industry. We’re here to take care of them. So our definition of care is now different.”
She’s considering a restructuring of her restaurant near the corner of 19th Street and JFK Boulevard to make space for more refrigeration and meal preparation.
HipCityVeg, a casual lunch and dinner spot with three locations in Center City and two in the suburbs, saw its sales plummet 90% when the pandemic paralyzed the economy, owner Nicole Marquis said.
The vegan eatery beefed up online ordering and partnered with delivery platforms it never used before. HipCityVeg also pivoted its marketing to remind customers that they can still get plant-based burgers and sandwiches for lunch while working from home.
Sales have since incrementally increased as customers learn that the eatery offers delivery and curbside pickup options, and are now down 40% to 50%, she said.
“It has given us an opportunity to invest more heavily in technology to reach customers digitally, including online ordering and more delivery options,” Marquis said. “We’re investing more in digital marketing, since not many people are walking by our shops.”
Some downtown stores don’t think they can adapt if remote work becomes permanent.
Dollar Plus sells clothes, toiletries, cheap electronics, and lately a lot of masks on Chestnut Street between 15th and 16th Streets. Roughly 80% of its sales typically come from office workers who walk in during breaks or after work to quickly grab items, owner Ashghar Ansari said. He said online shopping and delivery wouldn’t work for his business.
“This is not a food business,” he said. “People have to come. They look, they like, they buy.”
The breakfast business has been particularly hard hit with fewer people commuting to work. Dunkin said it saw business drop between the hours of 6-9 a.m. during the first quarter of this year. McDonald’s told investors that “breakfast will be the most challenged” part of the day.
Just 6% of consumers said they recently bought breakfast, compared with 64% for dinner and 26% for lunch, according to an online survey of 1,000 people in early May by Datassential, a Chicago market researcher. Four percent said they were excited to eat breakfast at restaurants again, the lowest result of any food category, the survey found.
“We have seen a big dip into early-morning traffic. And we will continue to see that,” said Kumar, the Temple professor. “All the recent studies say that 6 a.m. to 9 a.m. window, it is going to go down over time. And it is permanent.”
Some are more optimistic that telecommuting consumers will still want to work in coffee shops and restaurants in a post-pandemic world.
Ellen Yin, owner of five restaurants in Philadelphia, including High Street on Market, used to work from home as a consultant and said she found herself craving social contact.
“I think that a lot of those people do want to get a break or do want to get out for a short period of time, whether it be for a cup of coffee, sit in the park, get some sun, bring their laptop someplace where they see people,” she said. “Maybe they don’t feel comfortable right now, but when the outdoor dining becomes open, and this all kind of settles out … then we’ll know better.”
Mohiby’s gyro cart can’t offer delivery or outdoor seating. Before the pandemic, he largely relied on nearby Comcast workers, many of whom love his popular goat biryani, he said. He accepted Venmo and Cash App payments to serve tech-savvy millennials.
These days, Mohiby thinks he’d be better off parking his cart somewhere else, far away from the Comcast towers. Perhaps he’d find more hungry workers in residential areas.
“Outside the city is better,” he said.