Food News

Colorado Restaurant Association Stats Back Dire Industry Predictions

This is the new normal for many restaurants fortunate enough to be able to stay open.
Evan Semón
This is the new normal for many restaurants fortunate enough to be able to stay open.
March 2020, to put it bluntly, was one of the worst months in Colorado history for the food-service industry. On March 17, the day all restaurants in the state were closed to dine-in service, tens of thousands of workers found themselves without jobs as businesses across the state laid off both front- and back-of-house staff. The Colorado Department of Labor and Employment website was clogged for days as new applicants filed for claims at an unprecedented rate.

The Colorado Restaurant Association just released statistics illustrating how bad the coronavirus crisis has been for the industry. When restaurants and bars were ordered to close their dining rooms to customers from March 17 through May 11 (for Denver) and April 30 (for the rest of the state), the prevailing opinion was that many would never reopen. While delivery and takeout sales have mitigated some of the losses, they represent only a fraction of the revenue that restaurants and bars would generate in normal months.

The CRA's statistics cover from March 1 through March 22, so only five days of the official restaurant shutdown are included, but customers were already beginning to stay home before the mandated closures, and on March 17, sales ground to a halt for a large number of establishments. In total, the CRA estimates that Colorado's restaurant industry lost $465 million in sales and more than 150,000 jobs in the first 22 days of March.

The CRA conducted a survey of member restaurants from March 23 through March 26 in order to compile statistics about sales, employment and operations. Of those members that responded, 81 percent reported laying off employees, and 56 percent said they planned to do more layoffs in the next thirty days; 60 percent had changed their business model to takeout or delivery only, while 44 percent had closed completely. (While that adds up to more than 100 percent, it just reflects how quickly restaurants are having to shift.) Although only 2 percent of the restaurants surveyed reported closing permanently, another 14 percent anticipated that they would be doing so in the next thirty days.

click to enlarge Benny's Restaurant & Cantina and many other businesses are closed during the shutdown. - ETHAN HERROLD
Benny's Restaurant & Cantina and many other businesses are closed during the shutdown.
Ethan Herrold
Sales were already slowing in February, traditionally a down time for restaurants, but 92 percent of the restaurant owners surveyed said that March sales were much lower than they had been last year at the same time, with an average decline of 51 percent.

While the CRA stats are grim, the organization does share some good news: Personal paycheck protection loans made available by the recent federal CARES Act will help employers retain and rehire employees as restrictions begin to lift.

"This CARES Act/SBA loan program was a lighthouse on a rocky shore in a battering storm for many of us," notes Dave Query, chef/owner of the Big Red F restaurant group, which owns the Post Brewing Co., Jax Fish House and several other restaurants. "Getting these boats safely to shore is now the challenge."

But the CRA has also heard reports from members that getting access to the loans has been difficult, depending on how organized specific banks and lenders have been.

The CRA is doing more than just gathering statistics; the organization is doing everything it can to support member restaurants. "We're 100 percent focused on two things right now: one, advocating for and securing relief for restaurants at every level of government; and two, being the quintessential hub of information for restaurants in the COVID-19 pandemic," says CRA President and CEO Sonia Riggs. "To the first end, we're on the phone with federal, state and local officials and our counterparts at the National Restaurant Association every single day, and while we have a long way to go, we're thankful that many of our requests have been met."

Those requests include the addition of restaurant-specific items in the federal CARES Act, the temporary relaxing of liquor laws to allow alcohol takeout and delivery sales statewide, and a moratorium on parking tickets at the local level.

"To the second end," Riggs continues, "we're maintaining a comprehensive online Coronavirus Resource Center that covers executive orders that apply to restaurants; compliance information; details on how to apply for different kinds of relief; resources for businesses and employees; a directory for products, services and resources; and much, much more. And our daily email covers how this information and these resources are changing."

Restaurateurs can sign up for the daily email on the CRA website. Riggs notes that the organization is also hosting a series of webinars with experts and elected officials, covering everything from what restaurateurs need to know to access the Paycheck Protection Program to mental health to marketing strategy during the crisis.

Restaurants and other food-and-drink establishments have been forced to get creative during this tough time, setting up funds for their furloughed employees and creating alternative revenue generators such as grocery boxes, meal kits and booze specials, among other things. And while dealing with their own challenges, some restaurants have devised pay-it-forward programs to allow customers to pay for food that's then sent to hospital and other health-care workers.

But the coronavirus closings will continue to have a major impact in the weeks to come, stretching from restaurants to related industries such as farms, food producers, wholesalers, importers and restaurant-service companies. Still, while April's statistics are likely to look worse, Riggs says that recovery will eventually happen.

"If the feds can get the problems with the Paycheck Protection Program ironed out, including making some adjustments to the current program, and can implement another relief package — something we hear they're working on — then we're hopeful that many restaurants will be able to scrape by to reopening," she states. "We were encouraged on a call with Governor Polis yesterday that the state is thinking about the details of reopening, and how to reopen dining rooms in a way that will ensure the public understands it's safe to eat in restaurants again.

"And more than anything, even amid this crisis, we see restaurants continue to serve as community pillars — they're making meals for health-care workers and offering pay-what-you-can and free meals for people in need, including displaced industry employees, families who need assistance, and the elderly," she adds. "We expect that whatever happens, restaurants will continue to be an essential part of the community fabric, and havens for all of us as we heal."