Restaurant industry continues to be the last to recover

Published 10:00 am Tuesday, July 12, 2022

Getting your Trinity Audio player ready...

Olivia Johnson contributed to this article.

As inflation, labor shortages, and the cost of running a business increase, many locally-owned restaurants have been just able to keep afloat. However, many have sunk under the pressure. 

Locally, restaurants like Global Sports Bar and Seafood on West Point Road closed their doors for good earlier this month, a victim of the pandemic that has affected restaurants across the county.

Restaurant owner King Wang has been in the restaurant business for years and owns Global Beverage Superstore just a few buildings down from the restaurant. Like other affected restaurants, Wang noted staff shortages and liability risks.  

“I didn’t necessarily want to close down but with a storage of staff and business being slow, I had to close down for the time being,” he said. 

Wang has been in the restaurant business for years and owns Global Beverage Superstore beside the restaurant. Global Sports Bar opened in 2019.

In Hogansville, The Great Southern Pub, closed its doors in early June. The owner of The Pub, Barry Morgan, was reached for comment following closure but did not respond.

Posts on The Pub’s Facebook page noted the business had to close for extended periods due to sick staff members in May.

Karen Bremer, CEO of the Georgia Restaurant Association and a former restaurant owner, said these issues have become everyday problems for restaurants of various capacities across the state. 

“There are people who are just not surviving,” Bremer said. “Between staffing and the inflationary pressures of commodities and food, it’s affecting restaurants greatly.”

Bremer said rising prices are causing Americans to cut back on discretionary spending. For fast-food restaurants specifically, the average price for an entree meal is approximately $10.50, an over 30% increase from 2019. 

Rising prices have additionally issued wage increases for restaurant workers, Bremer said. 

“Food costs over the past year are up over 18%, and labor costs are up by 13% now,” Bremer said. 

During the initial pandemic, many restaurant workers left the industry to pursue different careers when restaurants cut staff or closed down temporarily, Bremer said. Many women specifically stepped into caretaker positions and still have not ventured back into the workforce as they did prior to 2020. Many workers also took early retirement.

Another recently discovered challenge lies in the number of available entry-level workers, Bremer noted.

“The entry-level for any industry is the 18-24 age group. This age group is people who are graduating from high school or college, and right now there are fewer people [entering the workforce] of this age group,” Bremer said.

This struggle has not stopped newer restaurants from opening or even expanding.

Bull Hibachi, a Japanese eatery in Troup County, opened its third location in West Point earlier this year. The restaurant’s owner is expanding into a neighboring building — the former of the CheesyMac Deli — to open a related ice cream and boba tea business. Hogansville as well saw a modest boom with the introduction of a new high luxury eatery, 54 and Main, the Twin Mills Winery and even a new coffee shop, Fuel Coffee.

Even Wang said he was planning to open another restaurant. 

“I’m working on it right now. Hopefully, within a couple of weeks, I will know what’s going on,” Wang said.

Bremer said those with the resources to negotiate rent deals may be able to open restaurants more inexpensively when they open in former restaurant locations already equipped.

Currently, Bremer predicts the next year and a half will be a true test for restaurants across the board. Some will survive, others will plummet. Bremer noted from personal experience upscale restaurants will see a greater hit though fast-food restaurants, due to lack of workers, will see harder hits than previously seen.

“Those who were in precarious situations prior to rising gas prices and inflation will have difficulty making it through,” Bremer said. “Those who are more financially stable coming into the business will have a better chance of survival. [Restaurants] will never get the money back that they lost from the financial devastation of 2020.” 

Of approximately 19,000 restaurants in Georgia that were in existence in 2020, 60% temporarily closed due to COVID restrictions. Approximately 4,000 closed altogether. Bremer estimates from prior data this was a nearly $5 billion loss in restaurant revenue across the state.