David Seminsky is the owner of Sumerian Coffee Roasters and Boom Boom Bagels. We caught up with him to talk about the lockdown and its impact on Shanghai's F&B scene.
Describe the toll of Shanghai’s citywide lockdown on your venues?
The lockdown has been challenging to navigate. The timing of it couldn’t have been worse. Business is poor during the winter, and we count on spring to recoup cash flow.
For most F&B outlets, cash on hand is at its lowest in February due to poor sales in December and January, followed by February’s Chinese New Year Holiday. This made it more challenging to cover rent and employee salaries during the three-month lockdown.
We planned to open another Boom Boom Bagels and renovate Sumerian. However, that cash has been used to cover expenses during the lockdown. I don’t anticipate being able to invest in another F&B outlet for at least another year.
On a positive note, I’m optimistic about the future of Shanghai; I believe the businesses who push through this and implement innovative sales strategies to stay afloat will come out stronger.
And what were the effects of the lockdown on you and your staff's mental wellbeing?
I’m so proud of my team; they are amazing. For the most part they pushed through it, but I could tell some were struggling. I gave them light work to keep them busy and their minds active.
I’m based in San Diego, so mentally this didn’t influence me. However, during the past lockdown I literally went crazy and had to go to the hospital twice.
I was concerned for my employees; I know the mental damage a lockdown can cause. But, to my surprise, they were enthusiastic and happy to get back to work. I’m incredibly lucky to have this team.
Did you have to let any staff go?
No, we didn’t let any staff go. That never crossed my mind.
How long do you think it will take the Shanghai F&B industry to recover from the effects of the lockdown?
The duration of the recovery depends on future COVID-19 policy. However, my gut tells me the industry will recover by October.
With just takeout and delivery we are performing at about 60% of what we should be doing. In addition, about 20% of our business is expat generated, which I think will be reduced by 5-10%.
There are a lot of factors to consider, some business might recover faster than others, depending on how quickly they can adjust their business model to adapt.
What percentage of restaurants do you think we will see shutter for good?
In the US, approximately 1 in 6 restaurants closed due to the 2020 lockdown, according to the New York Restaurant Association. This is with the US providing stimulus funds to restaurants.
I’m not aware of any stimulus Shanghai plans to distribute. So – at a minimum – I think we will see 15% of restaurants closing, but it could easily be as high as 40-50%.
Have you made any changes to your business model as a result of the recent lockdown?
At Sumerian, we are making a lot of changes to our business model. We’ve created a line of adaptogen lattes which use Chinese medicinal herbs and mushrooms to improve one’s well-being. Our hope is to attract new customers that offsets the loss in expat consumers.
For both Sumerian and Boom Boom Bagels, we are focused on delivery, new products and marketing. We have innovative promotions in the works.
A recent example is to provide gifts in our delivery bags, like Happy Meals. We are also launching new products at both venues to increase sales.
Lastly, we are investing more in marketing and digital engagement through WeChat articles.
Now that the city is opening up, aside from dining-out/ordering takeout, what can customers do to support your venues?
Supporting us through ordering take-out or delivery is a huge help and always appreciated.
The next best thing would be for customers to add our WeChat account. Customers can stay up to date with new products, promos and learn more about some new initiatives we are undertaking.
See a listing for Sumerian Coffee Roasters 415 Shaanxi Bei Lu, by Beijing Xi Lu 陕西北路415号, 近北京西路
See a listing for Boom Boom Bagels 39 Anfu Lu, by Changshu Lu 安福路39号, 近常熟路
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