Restaurants anxious as omicron, high food costs take toll | Business

By Lolly Garcia On Dec 20, 2021

DETROIT – While restaurants in the US and UK are fully open and often busy, they fearfully enter their second winter of the coronavirus pandemic: They are being weighed down by labor shortages and skyrocketing food costs, and the Omicron variant is looming.

“I’m very worried. I’ve never felt like we were out of the woods, ”said Caroline Glover, cook and owner of Annette restaurant in Aurora, a suburb of Denver.

The rapid expansion of Omicron is already affecting the industry in the UK and elsewhere. Restaurants, hotels and pubs report cancellations during the busiest and most lucrative time of the year. Companies urged the UK government to offer relief after officials warned people to think carefully about socializing. Scotland and Wales have pledged millions of pounds for business, adding pressure on Prime Minister Boris Johnson’s government to do the same in England.

“It’s pretty devastating. For private rentals, larger tables from say eight to

16 people, they have all but disappeared. This is the bread and butter for restaurants this holiday season, ”said Jeff Galvin, co-owner of Galvin Restaurants, a group of five fine dining restaurants in London.

Many companies said hundreds of celebratory business lunch bookings disappeared almost overnight as infections began to rise, and Johnson announced stricter restrictions, including making it mandatory to wear masks in most indoor spaces, even though restaurants remain open as usual.

Glover in Colorado fears renewed restrictions if infections increase. For now, business has returned, her dining room is back to full capacity – up from a 50 percent cap last year – and four outdoor greenhouses booked well in advance.

Similarly, diners have returned and business is doing well for Amy Brandwein, who owns the Centrolina Italian restaurant and little Piccolina coffee shop in Washington. After her restaurants weathered the snack and grocery lockdown, “I could safely say that we’re back to 2019 levels,” she said.

But staffing remains a challenge. In a recent survey of 3,000 US restaurant owners, 77 percent said they didn’t have enough workers to meet demand, according to the National Restaurant Association, an industry group.

Many restaurant workers started new careers or went back to school. Jada Sartor of Grand Rapids, Michigan saw her wages rise from $ 10 an hour to $ 16 an hour this year as restaurants desperate for workers, but she recently quit her waitress job because of her did not find affordable childcare.

“The cost of living is just so high that you can’t really afford to live,” she said.

Kristin Jonna, owner of Vinology restaurant and wine bar in Ann Arbor, Michigan, said she nearly raised wages

40 percent to attract and retain their 35 employees. A change is needed in the service industry, she said. But she can’t raise menu prices enough to make up for that.

“Everyone knows that beef is more expensive, but highly qualified top workers are also expensive,” said Jonna. “That’s the very tricky part of our business at the moment.”

Jonna said the restaurant was humming despite the high number of COVID-19 cases in Michigan. She has fewer major events planned, but the customers who come in spend more.

US restaurant and bar sales reached an estimated $ 73.7 billion in November, up 37 percent from the same month last year, according to preliminary data from the US Census Bureau. But that was partly due to higher menu prices as restaurants try to account for inflation.

Sara Lund, owner of Bodega and The Rest, a bar and restaurant in Salt Lake City, Utah, said her ingredient costs have increased between 15 and 40 percent this year.

“Food margins will never be astronomical, even in good times,” she said. “But pay 40 percent more for protein? I can’t pass that on to the customer. “

Guests know restaurants are struggling, and many say they are eating out again to help their favorite places. Liz Cooper, of Needham, Massachusetts, said she was comfortable eating indoors with her family of five, all of whom were vaccinated but her 4-year-old daughter.

“If you like a restaurant and a small business, you should go out and support them,” said Cooper. “Maybe you have to close and then it will break your heart that you are not getting your favorite chicken parm or cannoli.”

Steve Geffen, who owns four restaurants in the Chicago area, including Once Upon a Grill, said he removed 30 percent of the tables from his restaurants to ensure customers were comfortable eating. So far it works.

“They don’t mind waiting longer because they know they are not sitting above everyone else,” he said.

But Jeanne Busch in Forest Park, Illinois sticks to the occasional take-away meal.

“I definitely don’t feel without a mask indoors in a crowd,” said Busch. “If we go into winter and omicron continues to rage, we assume that we mainly eat at home.”

Omicron has already devastated restaurants and pubs in the UK. Patrick Dardis, who runs Young’s 220 pub chain, said he hoped officials would come up with a financial relief plan soon. About 30 percent of the chain’s bookings were canceled last week.

“There are thousands of businesses – not just pubs – that could collapse in January if the current situation is not combined with adequate financial support,” he said.

UKHospitality, an industrial trade group, called for tax breaks, saying Omicron concerns wiped $ 2.6 billion in sales this month.

Restaurants are also calling for government support in the US, where the Restaurant Revitalization Fund dried up earlier this year after distributing $ 28.6 billion to 100,000 applicants.

Sean Kennedy, executive vice president of public policy for the National Restaurant Association, said the industry needs at least $ 40 billion to fund the 200,000 applicants who will not receive grants. So far, Congress has not done anything.

It’s harder for restaurants to explain what is happening now because their dining rooms are full and they are not locked, Kennedy said.

“They think we’re full and crushing everything, but the answer is we’re barely getting through,” he said.

Lindsay Mescher, who opened Greenhouse Cafe in Lebanon, Ohio, in 2019, is frustrated that she never received a promised government grant. It was approved in May, but demand was so great that the fund ran out before it received any money.

She took out loans to keep her eight employees on, while only offering takeaway for the first 16 months of the pandemic. The café reopened to guests this year and had a busy summer and autumn, but Mescher is still struggling. For example, she paid $ 165.77 for a box of 400 take-away salad bowls; now they cost $ 246.75.

“The funds would have ensured our survival,” said Mescher. “It is extremely unfair that some restaurants got relief and others didn’t.”