The omicron surge has led to another huge drop in business for restaurants around the country.
Erika Polmar is the executive director of the Portland-led Independent Restaurant Coalition. She told “Think Out Loud” that the country has lost 100,000 restaurants and could easily lose tens of thousand more if they don’t get relief from the government.
“At this point, 80 percent of businesses that didn’t get the RRF say they’re in danger of permanently closing. To make a percentage seem a little more real, that’s about 141,000 restaurants nationwide,” she said.
Polmar said some of your favorite restaurants may seem to be doing fine from the outside, but there’s more going on.
“We’re really good at making everything look fabulous. We’re like ducks: Everything’s smooth on the top of the water, and we’re paddling like hell underneath.”
The restaurant coalition is pushing Congress and the Biden administration to put more grant money into the Restaurant Revitalization Fund to prevent the loss of businesses and jobs.
The following transcript was created by a computer and edited by a volunteer>
Dave Miller: This is Think Out Loud on OPB, I’m Dave Miller. The seemingly never ending see-saw of the pandemic continues. Not that long after the Delta surge passed and people were once again getting more comfortable going to restaurants and bars, the Omicron surge arrived, leading to another huge drop in business. It has restaurant owners and advocates saying we could be seeing another huge wave of permanent closures as well. Erika Polmar is the executive director of the Independent Restaurant Coalition. Aaron Barnett is a chef and partner at La Moule and St Jack restaurants in Portland, and Lac St Jack in Lake Oswego. Welcome to both of you.
Aaron Barnett: Thank you.
Erika Polmar: Thanks Dave.
Miller: Erika Polmar, for the sort of regional or national look first, I’m just curious, and my understanding is you’re in touch with restaurant owners all over the place, can you give us a sense for what you’re hearing from them these days?
Polmar: Sure, first of all, thanks for having us. Restaurants nationwide are really struggling. We have been wrestling with the pandemic since March of 2020, many restaurants have not received any financial assistance from the federal government, and things are really dire. They have mountains of debt from all of the pivots that I’m sure Aaron can tell you about that they’ve done to keep their businesses afloat. They’ve got rising supply costs. And at this point, 80% of businesses that have not received a Restaurant Revitalization Fund grant are reporting that they’re in danger of permanently closing. To make a percentage seem a little more real, that’s about 141,000 restaurants nationwide.
Miller: 80% that didn’t get funding from federal relief, 80% say that they are in danger of closing permanently?
Polmar: Yes. That’s correct.
Miller: Aaron Barnett, what kinds of pivots, to use Erika’s word, have you gone through with your restaurant group over the last two years?
Barnett: Oh, I mean you name it. We’ve tried to do everything there was to do. I mean in the beginning, we thought it was gonna be three weeks. I remember standing in front of my staff and telling them not to worry, we’ll be back in about three weeks. And here we are now. But we’ve done everything from bottled cocktails, take out, people sitting outside eating off paper plates, people sitting inside but spaced out. We’ve done everything that was kind of possible for us to do. And you know, here we are today.
Miller: How long were the doors of your restaurants actually closed fully to people for indoor dining?
Barnett: La Moule was closed for the better part of a year.
Miller: Then you did open up in 2021?
Barnett: Yeah, I was lucky enough to, one of my old chefs came back and wanted to work, and so we started putting everybody back to work at that point.
Miller: One of your chefs came back. How challenging was it to hire either new staff or older staff to come back once you did reopen?
Barnett: Well to be honest, a lot of people got out of the business. A lot of people realized that this wasn’t for them anymore. But there were a number of people who wanted to come back and come back to their old jobs. I’ve been lucky that management specifically was something where I had a pretty easy time finding people. It was finding hourly employees where it became more challenging.
Miller: What was business like when you did finally reopen?
Barnett: Busy. Very, very busy. People have been supportive. But again, it was hot and heavy for quite a while, and then it kind of started to peter off. And I think that was just kind of an excitement thing, that people wanted to get back out. There was hope, if you recall that 1-2 week span where we didn’t have to wear masks.
Miller: Yeah, hot vax summer of two weeks.
Barnett: Yeah, it was a very sexy period to be alive. And now, Omicron’s here. It’s January, which is notoriously the slowest month of the year for restaurants across the board, and so it’s challenging.
Miller: Erika Polmar, I want to go back to something you mentioned, so it’s the 80% of restaurants that responded to your survey that didn’t receive money from the Restaurant Revitalization Fund, those are the ones who say they are in danger of closing. So if they didn’t get money, does it mean that they didn’t apply in general? Or that they applied and were turned down?
Polmar: Thanks so much for that question, Dave. The Restaurant Revitalization Fund was sorely underfunded. So without getting too wonky here, the grant program was created as part of the American Rescue Plan, and it had $28.6 billion. We know that restaurants needed far more than that. Our original request, through the courageous leadership of Congressman Blumenauer, was for $120 billion. So when the grant program opened for applications in May of 2021, 300,000 businesses applied, and only one third received funding, because there wasn’t enough money in the fund. So when I say 80% of businesses that didn’t receive funding, it’s not by any fault of their own. They got their applications in, they have been waiting 266 days for the federal government to replenish this fund, and that’s not happened.
And so they are maybe in Aaron’s position where they had a couple of great weeks during hot vax summer. Maybe they found a model to keep some of their folks employed. But a few weeks of good sales does not make up for the many, many months or years that folks have been closed.
Miller: Aaron Barnett, what about you? Were you able to get money through this RRF?
Barnett: I was not able to get it at La Moule at all, no. So it’s been a struggle. We’ve had to figure out how to restaff, retool, change the concept a tad so it makes more sense. It’s a constant moving target. There’s never anything simple about this anymore. Not that it’s been a simple business to be in in the first place. But all I can say is that we’re doing our best. And I’m not sure where that is.
Miller: Erika, if the patterns that we saw first in South Africa, then in the UK, in New York City, which is ahead of the rest of this country in terms of getting hit by Omicron, if those hold true in Oregon and around the country, the Omicron surge will be over relatively shortly. Not to minimize the terrible trauma and damage in terms of human lives and cases and disruptions to our lives, but it’s supposed to be over relatively soon. Why can’t restaurants just get through the next, say, three weeks?
Barnett: That’s a great question. I think you may walk down your favorite street and see a restaurant that looks busy to you. In hospitality, we’re really good at making everything look fabulous. We’re like ducks, everything smooth on the top of the water and we’re paddling like hell underneath. A couple of good weeks, a variant moving through quickly, does not make up for 2020. And you also don’t see all of the other things that are happening behind the scenes in the restaurant. For instance, I’m sure if we talked to Aaron about what his supply costs look like, they’re probably doubled. His labor costs are probably higher. And your menu prices can’t necessarily reflect that.
So the challenges that the restaurants face are immense. And then also this time of year, first quarter, again, Aaron would be better suited to answer this, is never a good quarter for restaurants. You’ve got folks who are doing dry January or committing to their health or tightening their belts before tax season. We usually see a really great fourth quarter, and that helps restaurants weather the first quarter. But really what we’re looking at right now is this isn’t a matter of weathering one more variant. This is the fact that restaurants have been severely impacted by lack of consumer confidence, increased debt, and increased supply costs for, now, almost three years.
Miller: Aaron Barnett, do you have a sense for how much longer you can go on without a major change in consumer habits or federal support?
Barnett: I mean, I think I can speak for almost all restaurateurs at this point in time. There are some people who are lucky, and there are some people who are doing really well right now, there are some people who aren’t. And that is the vast majority.
Spending money at restaurants is important. Obviously, guests are the biggest contributor to what we do. But at this point in time, it has been three years of, for lack of a better term, just garbage business. And we are doing our best and trying to squeak it out and trying to pay our staff, trying to give them insurance, trying to give everybody everything that we possibly can. And with it costing $120 to fill a deep fryer now with oil, things like that, it’s nearing impossible.
So, you know, I don’t know. I think everybody’s going to be in a different boat. And that’s why you’re seeing restaurants start dropping bit by bit, month by month off the map. And you know, at this point, I can’t tell you exactly how many restaurants have closed, but it’s going to continue unless there is some sort of support.
Miller: Just briefly, Erika Polmar, not that you want this to happen, but are you assuming that based already on the restaurants that have closed, we’re going to be looking at a different version of restaurant culture going forward? Or that new restaurants will eventually take the place of old ones?
Polmar: Nobody gets into the restaurant business because it’s glamorous. They get into it because they believe in hospitality, and they believe in providing a good experience. Currently in Oregon, we don’t have a business climate or a population that is going to support new restaurants that are the restaurants you expect of Oregon. So a restaurant like Aaron’s is not easy to replace. And if he were to lose his space and the Chipotle were to pop up, I don’t think that’s the future any of us want to envision. And quite honestly, I just refuse to think that that’s what our future holds. Oregon’s restaurants and bars support our 34,000 small farms. They support our brewing industry, our distilleries, all of the things that make Oregon, Oregon. We don’t have an option to fail. We don’t have an option to let these businesses go out of business.