As patrons return to the restaurants and bars that survived a year of pandemic, the businesses face a long march back to profitability.
The health crisis and resulting shutdowns, proved fatal for some local eateries and taverns. Several, including Little Nugget Diner, Rounds Bakery’s storefront, and Sante Fe Basque, closed permanently last year, most citing pandemic-related pressures. CNN reported that about 110,000 restaurants have closed for good since the pandemic and the Nevada Restaurant Association estimated that 30% of the Silver State’s restaurants had closed in 2020.
Those are grim statistics, but there’s also good news. Vaccine rates continue to rise and the economy is getting back on track. On May 1, state county officials took over COVID-19 health protocols. Gov. Steve Sisolak expects the state to be fully reopened by June 1.
Still, some surviving businesses may have to again shift gears to get back to pre-pandemic operations. In 2020, many switched to takeout or delivery options and some had to entirely change business models to stay afloat.
A sweet solution
For Sugar Love Chocolates, the chocolate shop previously located in the underground shopping center known as The Basement in downtown Reno, owner Krysta Jackson had to close her doors and switch from retail to wholesale sweets production.
“We relied on downtown office workers and tourists,” Jackson said. “Because of the closure, we’ve had to really re-evaluate where the businesses going. So retail is not the solution for a long time.”
Jackson was forced to lay off her staff at the start of the pandemic and closed her five-year-old storefront last June. Her ability to pivot kept her in business. As the preferred chocolate vendor for Sparks Florist, she was able to shift fully to wholesale operations. She also sells her wares at local farmers’ markets and has applied for the reinstated Food Truck Friday event. Her products also evolved to adapt to a new normal.
“So switching from really high-end chocolates, which is, of course, my passion, to doing things more like brittles and caramels, which are more shelf-stable and sell really well at the markets,” she said.
Hold the beer; sell the games
Other businesses had a harder time adapting to the conditions of the contagion.
The Glass Die, the board-game bar in Midtown, which has a unique business model, struggled with COVID-19 regulations. It put the beverage sales on hold and became a retail shop. While board games’ sales were always part of the business, owner Jeff Carter said it’s not a sustainable option.
“We opened our business model to not do retail,” Carter says. “We opened to try to make gaming affordable and easy for people… Margins for this industry, they’re not very good. It’s pretty niche as a hobby.”
In a series of tweets, the Glass Die shared that to stay viable with retail sales alone, it would have to double its net profit, from about 30% to 45%. That was never part of its business plan, which relied heavily on the revenue from alcohol sales.
‘Like Groundhog Day’
Carter said while the Glass Die was able to receive multiple grants and loans to keep it afloat, confusing terminology about whether the business was a gaming operation or a bar forced it to close multiple times throughout the year.
“So I think when they were writing the mandates, they probably didn’t think who would be affected by what they wrote,” he said. “It specifically was no ‘interactive gaming and bars’, because they wanted to target pool tables.” Carter said county officials told him that the Glass Die had to choose between being an establishment for gaming or for drinking even though his business was built on both activities.
He often had to turn away confused guests. “Every interaction I had with people for months on end was ‘This is so unfair. Why can’t you be open and why are they open?’” he said. “It was like Groundhog Day, but really, really bad.”
The Glass Die was able to add tables again in February, with reservations required for players, and customers were able to sit at the bar after May 1. He likely won’t see a profit return until 2023, he said.
Carter is cautiously optimistic, but warned the struggle with the pandemic isn’t over. “We made it past the ‘oh my god we might go bankrupt phase.’ We’re definitely not out of the woods, but if I had to even play the odds? Like a 10% chance of failure,” he said. “We’ve essentially lost six figures last year, which is huge for a business.”
Christina and Toby Savage, owners of Midtown Eats, bought the restaurant in February, weeks before Gov. Sisolak shut down Nevada.
“I think it kind of kicked us into just survival mode. It was terrifying. You know, we just dumped everything and moved our family across the country,” Christina Savage said.
The couple always wanted to own a restaurant, and after years of moving, they were eager to set down roots with their five children.
“Restaurants have always been in our blood. The sound of the people chattering and the bells going off for drinks and for food, the different aromas being cooked… I love all of that. And I just get so excited whenever the store is full and everybody is laughing and chattering and making memories. It’s just the most incredible thing in the world. I absolutely love it.”– Christiana Savage, Midtown Eats.
On shaky ground
Savage and her husband grew up in Arkansas and moved to a number of places before settling in Reno. She told her children, who were used to moving often, that this was it.
“Especially my older kids, they’ve moved a lot, so they really want a forever home,” she said. “We just dumped everything into this, and I told my kids that we’re staying here and that we’ve set roots and this is it. And all of a sudden I felt like the ground got very shaky.”
Midtown Eats spent months during the shutdown offering takeout and providing free meals to children. When restrictions slowly started to ease up, the couple worked in the restaurant themselves.
Hiring is the challenge to reopening restaurants at full capacity now, a trend mirrored in restaurants across the country. Midtown Eats posted many employment ads, but is struggling to attract workers, a story often heard at local eateries.
Attracting new workers
Sabri Arslankara, the owner of Pizzava said his restaurant fared relatively well during the pandemic but noted that retaining employees continues to be his biggest challenge. ‘It’s the lack of applications,” he said. “And then we have no shows. We have ten applicants, and seven don’t show up.”
There is a lot of speculation about the restaurant industry’s sudden inability to hire workers. Some opine that extended unemployment benefits may be enticing workers to continue to stay home, while others think it’s because many restaurant employees moved on to other industries after being laid off last year.
Some owners, including Carter, said the low pay and unpredictable tips have finally turned people away from the industry.
“It’s not terribly fair for me to throw other bars under the bus if they don’t pay people a living wage,” Carter said. But relying on tips isn’t a sustainable lifestyle for a lot of people, he said. At The Glass Die, which pays employees $15 an hour, employees aren’t reliant on tips.
“There’s a huge Diaspora of service industry people who, during COVID, were forced to find other work. I think a lot of those people opened up to like, ‘Oh my God, why would I ever go back to doing that thing?’”– Jeff Carter, The Glass Die.
Struggles aside, Carter said he was continually surprised by the enthusiasm patrons showed for his business.
“The amount of people who would have been devastated if we closed was amazing. It was very surprising because even if it was just someone buying a game online and picking it up curbside, they would say how much they love the business every time I saw them, which was great,” he said. “The success of the business doesn’t make sense to me. People love it and that’s kind of what got us through COVID.”
Savage, like Carter, said the Reno community kept her going through the contagion, especially when she and her family ran a free meals program for kids early in the pandemic. When she had trouble finding certain food items for the children’s meals, residents stepped up to help.
“I put out an SOS on Facebook asking for donations to help us feed these children, and all of the sudden people in the community, from business owners to regular people I didn’t even know, just started bringing in all of it,” she said “… The community is the only reason we were able to run that program as long as we did.” She estimated that at the height of the program, which ran from March to May of last year, Midtown Eats was feeding 75 kids a day.
That sense of community is what kept her going when things were tough. Savage said she has experienced panic attacks and, like many business owners in the last year, lost sleep worrying about her business.
“So basically I’m just looking at one day at a time. I’m telling myself we’re just looking to get through today,” Savage says.
A brighter future
Now that the end of the crisis seems to be in sight, Savage is optimistic: “I feel pretty good. The community has not failed us. They have held us up and embraced us and I know that we’re not going to give up like that.”
Jackson said staying in business means understanding when to make changes. “A good indicator of entrepreneurs how they survive obstacles, I think. And hopefully, I fall into that,” she said.
She recently took part in an economics research interview. Business owners and entrepreneurs were asked how they plan for what Jackson calls “the unknown unknowns.”
“They asked, ‘well now that you’ve been through the pandemic, how do you feel about planning for unknown unknowns?’,” Jackson recalled. “And I was like, ‘the exact same.’ Because I never in my wildest nightmares thought I was going to live through a pandemic let alone own a business during one. So, you just have to play the cards that you’ve been dealt and make the most of what you’ve got.”