On normal summer nights, the lines are out the door at Beau Jo’s in Idaho Springs. The original location of the Colorado mountain pizza chain just doesn’t have enough seating in its scattered dining rooms for more than 600 people.
With the coronavirus pandemic, there are no more normal summer nights. But there’s still a wait for pizza. Continued statewide safety measures limit seating to only 50 people indoors. Getting an indoor variance and expanding to the street added 200 seats for the restaurant. With limited seating, the wait stretched nearly an hour during lunch time on Saturday.
And the hits keep coming. There’s winter months to think about when it’s not so nice to sit outdoors. And after reducing staffing to accommodate just take-out and delivery orders early in the pandemic, rehiring workers has not been easy, said Teresa Falco, a Beau Jo’s spokeswoman.
“Some of them didn’t want to come back because they were getting that $600 a week from the federal stimulus,” Falco said. “We had to hire (new employees) to cover the hours. It’s a very small percentage because obviously we can’t have our full staff back. We’re just not there yet. How can you be when you have a restaurant that seats 600 and now only have seats for 50?”
As the pandemic drags on, many businesses have outlasted federal financial relief and initial enthusiasm to adapt to a stay-at-home way of life. Recovery appears further away than many restaurants believe they can hold on. The restaurant industry already had a reputation as a challenging market with low margins and high turnover. The latest survey by the Colorado Restaurant Association found that 56% of restaurant members fear that if coronavirus conditions don’t improve, they’ll permanently close within three months.
“We knew it would be a rough re-entry,” said Sonia Riggs, CEO of the Colorado Restaurant Association, who estimated that 400 restaurants closed within eight to 12 weeks of the in-person dining ban. “But we were optimistic at that point that we would slowly be able to ramp up to higher capacity over the course of the summer. That has not happened. … This unanticipated limbo is its own crisis — restaurants run on thin margins in good times, and they are being bled dry.”
According to the latest data from the state’s Department of Revenue, the number of food and drinking establishments filing sales tax returns dropped 19.3% between March and May, to 10,604. That indicates that about 2,500 have either closed temporarily or for good. (April saw a larger drop due to the one-month sales tax extension that let businesses delay payments until May 20.)
If capacity restrictions continue, which is likely until a COVID-19 vaccine is approved, thousands of jobs won’t be returning anytime soon, Riggs said.
“Restaurants are currently reporting that their staff is about 63% of what it was last year at this time,” Riggs said. “Taken across the industry, that means we’ve lost at least 87,000 jobs.”
In June, the state’s Department of Labor and Employment estimated that there were 66,400 fewer jobs in the accommodation and food services sector than a year ago. The number of jobs had increased in May and June as restaurants were allowed to partially reopen to in-person dining. But with 227,100 people employed in this category as of June, that’s 23% less than June 2019.
Data aside, some restaurants continue to limit reopening out of concern for staff and the local community. Mountain Sun Pubs & Breweries has some of its restaurants open for take out, but doesn’t plan to reopen its Mountain Sun or Vine Street locations until the Spring of 2021.
Bread Bar in Silver Plume will reopen this weekend after being closed since mid March. But it’s not quite a public opening. The weekends-only bar is taking reservations only from small groups of families and friends “who already interact with each other,” said Sam Alviani, one of the bar’s four owners. Bread Bar stayed closed for so long for the sake of the community.
“It’s a really small town and they’ve done an incredible job mitigating their own risk successfully,” Alviani said. “So the idea of people shuttling in and out of town to come to the bar in any capacity, it just wasn’t sitting right with us and so we stayed closed for a long time.”
While not every restaurant can afford to be closed for three months, Bread Bar was lucky, she said. It received a Paycheck Protection Program loan and an Economic Injury Disaster Loan, both which were funded by the federal CARES Act.
The business was also renovating a house a block away to turn it into a vacation rental. It sold gift cards for “future experiences,” she said
“A lot of supporters came out of the woodwork. That was really helpful to us and allowed us to basically put everything on pause,” she said. “Even the most minuscule things, like our trash and our recycling, and our wireless. Things like that we were able to pause and that allowed us to float for a while.”
But should safety restrictions continue through winter or if there’s another statewide stay-at-home order, Alviani is unsure what will become of Bread Bar. She’s been trying not to think about that.
“I’ve been blocking my thoughts about those possibilities,” she said. “But there are a few things that will help us in our specific situation. We have always only been open on the weekends, our place is very small, we own our building outright. … But I don’t know. I think we’re in an OK situation if we have to sit tight, but it’s not ideal. We’re certainly feeling the pinch.”
“The industry is broken”
Running a restaurant has never been easy. Now is as good a time as any to start addressing those issues, said Robert Bogatin, director of Resilient Restaurants, a new program that was in development before the pandemic to make the restaurant industry more sustainable.
“Pandemic aside, it doesn’t matter. The industry is broken, now even more so,” said Bogatin, who said he grew up in a restaurant family in Philadelphia. “We don’t want to rebuild back to a normal that is completely unsustainable. … We need to find a new model, where businesses can thrive.”
The program is pushing local restaurants to work together and rethink the model so a business isn’t upended by the next minimum wage hike, or broken supply chain issue or perhaps, another global pandemic.
“What we’re trying to accomplish is addressing everything that’s unsustainable and completely broken about the food industry already,” said Bogatin, whose program is part of Good Business Colorado Association, which has advocated for paid family leave, automatic retirement programs and health insurance affordability on behalf of its small business members.
“There are pockets that are called food deserts, which are just areas of populated centers that don’t have proper access to food,” he said. “The Pueblo Food Project, for example, is addressing that in Pueblo County. They’re surrounded by agriculture and they have a whole section of town that’s a food desert.”
Bogatin said the industry’s high turnover rate is linked to the belief that restaurant work isn’t a respectable job because you can’t make a good living off it. Tipping has caused inequity between servers and the “back of the house” kitchen staff.
He brought in Edwin Zoe, founder of Zoe Ma Ma in Denver and Boulder, for an online webinar to share data and results about traditional tipping compared to a tip pool or a no-tipping policy but with a mandatory service fee, the latter which Zo Ma Ma has had for years.
By switching to a service fee that helped Zoe Ma Ma pay staff a higher wage, the restaurant felt less impact when the statewide minimum wage hiked up each year. While a no-tips policy wasn’t popular with veteran staff, it has attracted younger staff looking for a steady income.
“If anything, we found that new employees and people new to the industry tend to be very positive,” Zoe said during the webinar. “For someone who is not a veteran, making $25 an hour at 2,000 hours, which is 40 hours a week, that’s a $50,000 a year job. That is nothing to joke about. That’s a respectable career.”
There are no easy fixes, though Congress is contemplating a second $190 billion round of Paycheck Protection Program loans for small businesses that saw revenues drop 50% or more during the pandemic. The PPP program has provided $42.2 billion to 377,460 accommodation and food service businesses nationwide — or 8.1% of total funding, according to data from the Small Business Administration.
The Colorado Restaurant Association, which supported the sales tax moratorium in April, continues to work with local and state governments to remove costs for businesses.
It asked Gov. Jared Polis for policies to extend business interruption insurance, to cap fees by Grubhub and other third-party delivery services, consider tax credits or grants to provide personal protection equipment for restaurant workers, and suspend sales and use tax payments through at least September.
And there are other marketing and philanthropic efforts in the works.
Energize Colorado, a statewide effort to help small businesses, plans to start accepting applications to its $25 million Gap Fund this month. The program offers up to $35,000 in loans and grants to small businesses with fewer than 25 employees.
The state restaurant association has an “Angel Relief Fund,” to help out restaurant and hospitality workers in need. The organization also compiled a list of restaurants that are open for dine-in service and to-go orders.
But the biggest ask won’t be answered as long as COVID-19 cases in Colorado continue to rise: more capacity to seat diners.
“We would hope that we could, especially in the Idaho Springs store, have more seating available,” said Falco, with Beau Jo’s, “but I don’t think that’s coming.”