STAYING IN BUSINESS
Restaurants and small businesses struggle to stay open or reopen after nearly a year of pandemic chaos
The lettering on the sign in front of Kennedy’s Irish Pub today has a simple message to customers: “Welcome Back.” But it hasn’t been an easy year.
When the coronavirus pandemic first struck in March nearly a year ago, Kennedy’s decided to forego its annual St. Patrick’s Day celebration.
The Waterford Township family-owned bar and restaurant is planning on being open this year on March 17 with 25% capacity, but that depends on whether virus numbers spike up again and if there are new health orders that restrict indoor dining and service by then.
“We won’t find out again what the governor’s going to say until she comes back on,” said Erin Meilak, part of the family that has owned the bar/restaurant since 1972. “On the first, we’ll find out if she’ll shut us down more, stay at 25% or go to 50%.”
Kennedy’s, like most of the estimated 15,000 restaurants in the state, has been closed to indoor dining for much of the year – six months by Meilak’s estimate – causing the business to lay off some of its 23 employees and rely on carry-out trade to stay in business.
Some restaurants haven’t survived or cut staff and hours, and industry studies indicate many won’t survive without additional financial assistance from Congress, currently pushing a $1.9 trillion rescue package.
“It has been very depressing,” Meilak said. “It has been rough. I’m thankful to be at 25% (capacity). Hopefully we can get to 50%. We have our employees back and we hope business warrants keeping them all.”
U.S. Bureau of Labor Statistics data culled by the National Restaurant Association indicates that Michigan employment in the restaurant industry has fallen 44%, from 325,600 jobs in February 2020 before the pandemic began to 182,300 jobs at the end of the year.
Restaurant employment tanked in April before recovering somewhat in the summer months and the fall before taking another downturn in December amid new health orders restricting activity.
While the pandemic has taken its greatest economic toll on restaurants and the hospitality industries, other types of small businesses have also suffered from shutdowns or restrictions.
More broadly, a December survey by the National Federation of Independent Business found that one of four small businesses indicated they will have to close down within six months if current economic conditions don’t improve or without additional federal relief.
Another 22% of businesses responding to the survey indicated they could operate another seven to 12 months under current economic conditions.
The NFIB is an advocacy group for small and independently-owned businesses. It has conducted 14 surveys since early March.
“As the legislature and the governor continue to grapple with state assistance for small business, it is clear that the magnitude of the Michigan situation will require more federal relief,” said Charlie Owens, the Michigan director for the NFIB, in De
U.S. Bureau of Labor Statistics data culled by the National Restaurant Association indicates that Michigan employment in the restaurant industry has fallen 44%, from 325,600 jobs in February 2020 before the pandemic began to 182,300 jobs at the end of the year.
cember.
Another study by the National Restaurant Association and the American Hotel and Lodging Association in mid December found that 5,600 restaurants, or about a third of the restaurants in the state, were likely to close permanently without additional assistance to the economy, and that 850 hotels, or about two-thirds in the state, might not last another six months without more help or a revived economy.
While Congress passed the $2.2 trillion CARES Act last March to shore up both business and individual finances, most of that money has already been put to use.
Responses from small businesses in the December NFIB survey painted a grim future, at least in the near term:
• Most businesses – 91% – indicated they had spent their entire Paycheck Protection Program loans, and that 44% had applied for loan forgiveness.
• Among PPP loan borrowers, 22% indicate they may have to lay off employees in the next six months.
• About one-third of small businesses had applied for a federal Economic Injury Disaster Loan.
• One in five small businesses have applied for local or state grants.
• 19% of small employers indicated they have fewer employees than a year ago.
• Sales levels are 50% lower for one in five small businesses than before the pandemic.
• 36% of small businesses don’t expect economic conditions to fully improve until 2022.
Jenna Klar is co-owner of Toyology Toys, a family business that had four locations in Royal Oak, West Bloomfield, Bloomfield Hills and Rochester Hills before the pandemic forced store closings.
Her Rochester Hills store never recovered after the shutdown in March.
“When stores were allowed to open back up, we had lost some staff due to them needing to be home with their children during virtual school,” Klar said. “We didn’t have enough staff to open our Rochester store.”
There was some bounce back during the holidays this year.
“We did alright,” Klar said. “Many people utilized our website and curbside pick-up option. We felt people realized it was important to shop local even more now especially during this pandemic. We shipped out lots of orders as well for customers.
“We hope people still realize the importance of shopping local as we approach Valentine’s Day and then Easter,” she said.