Striving to Serve: Restaurants contend with ongoing pandemic effects

Tyler Hoke: Lost Signal Brewing lost 40% in-house revenue during pandemic.

Cassidy Rollins: Vaccinations could increase staffing levels.

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The restaurant industry was hard hit by the COVID-19 pandemic, beginning with forced closures in March 2020 due to stay-at-home orders followed by staff layoffs, reduced hours and operational changes required to stay afloat.

Even as restrictions begin to lift in Springfield, including removal of 50% occupancy limits for businesses that started April 16, restaurants are still in recovery mode.

According to a report released by the National Restaurant Association in January, restaurant industry sales in 2020 were $659 billion – down about 26% from expected levels. The number employed in the industry at the end of 2020 was 12.5 million – down about 20% from what was anticipated.

Cassidy Rollins, general manager of Progress on East Republic Road, said ownership was concerned about the restaurant as the year went on and other venues began to close.

“In general, it’s been pretty difficult. There’s been a lot of ups and downs,” Rollins said.

“I know a lot of my colleagues and other restaurants that both (head chef) Daniel (Ernce) and I really respect and love, not just in Springfield, were not able to make it through.”

An estimated 110,000 restaurants across the nation were temporarily or permanently closed by December 2020, according to the NRA.

In Springfield, there has been a 7.3% decline in active restaurant licenses since late February 2020, according to city officials. As of April 14, there were 609 licensed in the city.

‘A long road back’
One struggle facing restaurants during recovery is staffing. Greg Scheuber, assistant general manager for Downing Street Pour House, said the restaurant has struggled finding staff.

“One thing that has been impacted by this whole thing is people’s willingness to work when they get free cheese,” Scheuber said, referring to financial assistance that became available during the pandemic through stimulus checks and increased unemployment benefits. “That’s something we’re struggling with right now, is finding reliable staff.”

Rollins said Progress has faced a similar struggle as they work toward a return to normal hours and increased capacity.

When Progress closed last year from March 16 to May 5, staff was laid off, but many came back on when it reopened.

“A lot of people actually didn’t want to work because their government assistance was doing well and they could stay home, stay out of the fray of COVID,” Rollins said. “Working in a restaurant was pretty dangerous in regard to perhaps contracting COVID.”

Progress ran on a skeleton crew for most of the year but is hoping to bring staffing levels back up as Springfield’s vaccination rate rises.

Scheuber said Downing Street Pour House – which opened Aug. 27, 2020, amid the pandemic – was not affected by the stay-at-home order but did cut back hours of operation and had been operating at a lower seating capacity.

Tyler Hoke, owner of Lost Signal Brewing Co. LLC, said his brewery and restaurant on West College Street closed for a couple of months.

When it was open, Lost Signal reduced operations to five days a week, offering to-go beer but only offering food two days a week with a limited menu.

“We had a few people asking about food, but it was just never enough to do just to-go orders when there was no seating at all inside,” Hoke said.

Hoke estimates a 40% in-house revenue loss for the business over the last year.

While Lost Signal did not lay off any employees, Hoke said it lost a few after having to cut employee hours. Hoke received a federal Paycheck Protection Program loan for the business to support about 15 employees.

“Not having to worry about labor expenses for two and a half months was definitely a help,” Hoke said. “It’s a big expense.

On most days, we weren’t even covering the labor and food costs, so not having to worry about the labor costs was very beneficial.”

At Progress, Rollins said without the PPP loans the business received, the restaurant may not have survived.

“I don’t think we could’ve gotten by without it, and I think, in fact, us and most restaurants needed more,” Rollins said. “With restaurant margins being so thin already, even closing one night is hard to recover from.

“I think a lot of restaurants who made it through, as grateful as we are for the community support and the government assistance, it’s still going to be a long road back for a lot of restaurants.”

Aid on the way
Following in the footsteps of Coronavirus Aid, Relief and Economic Security Act funding and PPP loans, another federal grant funding program is in the works specifically to assist restaurants.

The Restaurant Revitalization Fund was created in the $1.9 trillion COVID-19 relief package known as the American Rescue Plan Act signed by President Joe Biden on March 11. The RRF will provide $28.6 billion in tax-free grant funding to food and beverage operators. The program, offered via the U.S. Small Business Administration, is still under development, said Ram Basnet, branch manager of SBA’s Springfield office. The SBA has not yet established an application timeline or deadline.

According to a fact sheet published by the NRA, eligible entities include restaurants, food stands, food trucks, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed alcohol tasting rooms or other similar businesses where the public can be served food or drink.

Individual businesses will be capped at $10 million in grant funding with a limit of $5 million per physical location, according to the fact sheet.

The grant amount cannot exceed pandemic-related losses of revenue, generally established by the applicant’s 2019 gross receipts minus 2020 gross receipts.

Once the initial 21-day period for awarding grants is open, SBA will prioritize grants for small businesses owned by women, veterans or the socially and economically disadvantaged, according to the NRA.

Additionally, $5 billion of the fund will be saved for applicants with less than $500,000 in gross receipts in 2019.

Businesses who received PPP funds are still eligible for the program, according to the fact sheet.

Rollins said the Progress team is aware of the RRF program and the restaurant’s accounting team is researching the application process.

If the restaurant qualifies, Rollins said the additional aid would be extremely helpful.

Hoke said he was aware of the program but hasn’t determined if he’ll apply. However, he said Lost Signal is still in a position where it could benefit from further aid.

“Our sales still aren’t back to what they were before,” Hoke said. “Our overhead costs are still the same, no matter how slow or busy you are.”