Colorado’s restaurant industry lost over $3 billion in 2020

BY FREDA MIKLIN – PERSONAL WRITER

On May 14, a roundtable sponsored by the Denver Metro South Chamber of Commerce led by longtime restaurant industry leader Larry Herz featured Mollie Steinemann, local government affairs manager for Colorado Restaurant Association. She represents the industry with the Colorado Department of Public Health and Environment and liquor licensing authorities.

Mollie Steinemann is local government affairs manager for the Colorado Restaurant Association, which has approximately 3,500 member restaurants, a board of more than 60 people, a paid staff of 19, and eight chapters statewide.

Steinemann reported that on March 16, 2020, all restaurants in Colorado were ordered to close for indoor dining due to the COVID-19 pandemic. This resulted in the loss of more than $3 billion in 2020 alone. At the height of indoor restaurant closures, the industry cut 94,000 jobs.

Steinemann explained, “Profit margins are around three to five percent for most restaurants, so with indoor restaurants closed, it was impossible to pivot without huge losses.” She continued, “When counties went red in November and December, many employees lost their jobs for the second time. It’s going to take significant support and time to get this industry back on its feet. Economists predict it will take five to seven years. Many will never recover.

As the pandemic continued, restaurants looked for ways to stay solvent. Adaptations included alcohol take-out and delivery, permission to sell food and provisions like toilet paper and toothpaste, expanded outdoor patios and alfresco dining in winter. “Expanded outdoor patios were huge for restaurants, especially with state and local government support and encouragement. Outdoor dining in the winter was hit or miss,” Steinemann said.

She also shared that last year’s experience provided both “silver linings and lessons.” These include:

  • Takeout and delivery are here to stay.
  • Restaurant staff have been streamlined.
  • There continue to be competitive opportunities in restaurants. Keeping them safe is rewarding for customers and employees.
Larry Herz is a longtime leader in the local restaurant industry. He opened many restaurants in the Denver area, including Carmine’s on Penn, Indigo, Uncle Sam’s, A-Bar Union Station, Go Fish Gill, and 730 South.

Restaurants, Steinmann said, “remain the mainstays of their communities. People want to come together for happy hours, weddings, parties, get-togethers. They are community hubs.

Another impact of the pandemic is that it has caused operators to take a hard look at how they compensate their employees. On the legislative side of the equation, Steinemann pointed to two pending bills and several other areas she sees as imperative for the industry to recover.

HB21-1027, currently pending at the general meeting, would extend the date by which on-premise liquor vendors can offer such beverages for takeout and delivery five years after its current expiration of July 1, 2021. It also “creates a communal outdoor dining program (which) allows multiple licensees (such as taverns, hotels, restaurants, and breweries) to join the zone and serve alcoholic beverages to diners in the zone, ( so long as) the licensee’s premises are within 1,000 feet of the area.

SB21-035, also pending, would protect restaurants by “prohibiting a third-party food delivery service (GrubHub, DoorDash, UberEats) from taking and arranging for delivery or pickup of an order at a point-of-sale establishment. detail without the consent of the institution”.

The other issue that Steinemann says is crucial to the restaurants’ survival is that the state is filling the state unemployment trust fund with federal stimulus dollars. She said: “It has to happen… The fund is completely insolvent. Without the state moving to top up the fund, rates will rise. We are already hearing from some restaurants reporting that their rates have increased by $4,000 per month. »

The industry would also like to see Colorado create a state version of the Restaurant Revitalization Fund that was part of the American Rescue Plan Act signed into law in March, as the federal program did not have enough money to address the problem. in this state.

Steinemann described several possible programs the state could create and fund to support the restaurant industry:

  • Employee hiring and retention bonuses
  • A media campaign to raise public awareness about the benefits of a career in the restaurant industry
  • Gift cards to restaurants to entice people to get vaccinated
  • Drinks or desserts at a flat or free price to anyone who can prove that they have been vaccinated.

Steinemann wanted to make sure people remember that “Colorado will remain a leader in culinary innovation.”

The final topic raised was the impact of millions of dollars of CARES Act money on the restaurant industry. Arapahoe County Commissioner Carrie Warren-Gully asked Steinemann if the money served the purpose for which it was intended. Steinemann said often the criteria were too restrictive for some companies to take advantage of, but noted that “that’s the nature of government programs.”

Herz added the following observation: “Not everyone has done the right thing with that money (from the CARES Act). It will be interesting to see if these programs will ever be audited by anyone.

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Cecil N. Messick