COVID-19 Restaurant Impact Survey – January 2022

COVID-19 Restaurant Impact Survey – January 2022

Omicron variant negatively impacted business conditions in Vermont

The omicron variant led to a rapid deterioration in business conditions for restaurants in Vermont. 89% of restaurants experienced a decline in customer demand for indoor on-premises dining in recent weeks, as a result of the increase in coronavirus cases due to the omicron variant.

Vermont restaurants took a number of actions in recent weeks, as a result of the increase in coronavirus cases due to the omicron variant:

    • 51% reduced hours of operation on days that it is open
    • 56% closed on days that it would normally be open
    • 31% reduced seating capacity
    • 20% changed to only offering off-premises for a period of time

As a result, 77% of operators say business conditions for their restaurant are worse now than they were 3 months ago. Only 2% say business conditions improved during the last 3 months.

This was on top of the cumulative effects of nearly 2 years of pandemic-induced challenges:

    • 59% of operators say their restaurant accumulated additional debt since the beginning of the COVID-19 outbreak in March 2020.
    • 57% of operators say their restaurant fell behind on expenses since the beginning of the COVID-19 outbreak in March 2020.
    • 73% of operators say their restaurant is less profitable now than it was before the beginning of the COVID-19 outbreak in March 2020.

The Vermont restaurant industry’s recovery is incomplete

A majority of restaurants have not experienced a complete sales recovery to pre-pandemic levels. 72% of operators say their sales volume in 2021 was lower than it was in 2019. Only 23% of operators reported a same-store sales increase between 2019 and 2021.

Much of the sales growth in 2021 was driven by higher menu prices, as restaurant operators were forced to offset sharply rising costs throughout their restaurant. 80% of operators say their restaurant’s total costs (as a percent of sales) were higher in December 2021 than they were in December 2020. Only 8% of operators reported lower costs.

Customer traffic levels also remained below 2019 levels for most restaurants. 75% of operators say their customer traffic in 2021 was lower than it was in 2019. Only 22% of operators reported an increase in customer traffic between 2019 and 2021.

 

The Restaurant Revitalization Fund saved many businesses and jobs in Vermont

100% of RRF recipients said the grant made it more likely that they would be able to stay in business during the pandemic.

85% of RRF recipients said the grant helped them retain or hire back employees that would otherwise have been temporarily or permanently laid off.

The National Restaurant Association estimates that over 3,000 restaurant jobs in Vermont were saved as a result of the initial round of Restaurant Revitalization Fund grants.


88% of RRF recipients said the grant helped them pay expenses or debt that had accumulated since the beginning of the COVID-19 outbreak in March 2020.

69% of RRF recipients said the grant was sufficient to cover all of their lost sales since the beginning of the COVID-19 outbreak in March 2020.

A replenished Restaurant Revitalization Fund would save more businesses and jobs in Vermont

54% of restaurant operators that applied for an RRF grant but did not receive funding said it is unlikely that they will be able to stay in business beyond the pandemic, if they do not receive a grant through the Restaurant Revitalization Fund.

88% of restaurant operators that applied for an RRF grant but did not receive funding said a future grant would enable them to retain or hire back employees that would otherwise have been temporarily or permanently laid off.

The National Restaurant Association estimates that future grants awarded after a full replenishment of the Restaurant Revitalization Fund will potentially save more than 4,000 restaurant jobs in Vermont that are currently at risk.

(Source: National Restaurant Association, national survey of 4,200 restaurant operators conducted January 6-18, 2022)

Most Restaurants Understaffed in December

Most Restaurants Understaffed in December
Restaurant employment continued to trend higher in December, but overall staffing levels remained well below pre-pandemic readings. Eating and drinking places added a net 42,600 jobs in December. The industry is roughly 650,000 jobs below pre-pandemic staffing levels. Read the full analysis from our federal partner, the National Restaurant Association.

Tip Credit/Dual Jobs Regulation

Tip Credit/Dual Jobs Regulation
The Department of Labor’s new dual jobs regulation that took effect December 28 states that restaurants cannot take a tip credit for the time spent on tasks considered “directly supporting work” that exceeds 20% of the workweek or 30 continuous minutes. Last November, the Restaurant Law Center filed an emergency lawsuit challenging the regulation and asking for an immediate injunction. It is expected that the court will allow the new regulations to remain in effect until February.
 
It is important to continue to take steps to comply with the new rules. Actions to consider taking include:
  • Conducting an audit of the job duties performed by your tipped employees.
  • Training managers on the new requirements.
  • Implementing new policies and procedures on side work.
  • Changing staffing model to hire new staff to perform side work tasks.
  • Adopting new timekeeping protocols for tipped employees.

Legislative Changes to Unemployment Insurance Could Hurt Small Business Recovery

Legislative Changes to Unemployment Insurance Could Hurt Small Business Recovery

The Unemployment Insurance (UI) Study Committee issued a preliminary report outlining two possible ways to update weekly benefits and funding. Both options would raise the weekly minimum and maximum benefit amounts for claimants. The Committee explored paying for this change by decreasing unemployment insurance contributions by roughly $100 million over 10 years while creating a surcharge directed to a special fund to provide for increased benefits.

The Vermont Chamber has protected the integrity of the UI Trust Fund and will work to secure unemployment insurance rate relief to help Vermont businesses have a safe and robust recovery.

Economic Advancement Through Liquor Law Modernization

Economic Advancement Through Liquor Law Modernization

Last session, a significant liquor law modernization bill was signed into law. There were several provisions that positively impact businesses and serve as economic recovery tools such as a temporary measure to allow alcohol to-go until 2023. While Act 70 signified a major progression, there were important provisions left on the table that the committees of jurisdiction did not have enough time to fully consider. This includes allowing low-alcohol spirit beverages (ready to drink canned cocktails) to be sold by the same retailers that sell beer, wine, and hard cider, and allowing small Vermont distillers to ship directly to consumers. Permitting Vermont distillers to do so would bring Vermont in-line with other states that have already passed a similar measure. Discussions around these provisions will continue this session. Continued adjustment and modernization of alcohol regulatory and financial policies is a priority for both the Vermont Chamber and our partner, Vermont Independent Restaurants. 

80/20 Rule In Effect

80/20 Rule In Effect
The DOL’s new tip credit regulations went into effect on December 28th. The regulation states that restaurants cannot take a tip credit for the time spent on tasks considered “directly supporting work” that exceeds 20% of the workweek or 30 continuous minutes. 
 
While the NRA filed an emergency lawsuit in a Texas federal court challenging the rules and asking for an immediate injunction while the case is being considered, it is expected that the court will allow the new regulations to remain in effect until February.
 
It is important to continue to take steps to comply with the new rules. Actions to consider taking include:
  • Conducting an audit of the job duties performed by your tipped employees.
  • Training managers on the new requirements.
  • Implementing new policies and procedures on side work.
  • Changing staffing model to hire new staff to perform side work tasks.
  • Adopting new timekeeping protocols for tipped employees.

Vermont Businesses Double Down on Digital Presence This Holiday Season

Vermont Businesses Double Down on Digital Presence This Holiday Season

By Amy Spear, Vermont Chamber of Commerce

Every holiday season, restaurateurs, retailers, and other small businesses encourage customers to shop local, with the shopping season formally kicking off with Small Business Saturday. As COVID challenges continue to plague businesses in all areas of operation from employee recruitment to competition for sales against giant online marketers, Vermont’s small business community is getting creative and taking advantage of the digital marketplace.

As the Vice President of Tourism for the Vermont Chamber of Commerce, I’ve witnessed our members doubling down on digital engagement to compete this holiday season for job recruitment, customer retention and engagement, and creative purchasing opportunities. Vermont makers and merchants have embraced an innovative spirit to meet their challenges head on.

Whether it’s maintaining and building relationships with customers or helping shoppers to experience the wonder of Vermont in person, developing a robust online presence is not only convenient and entertaining, but also essential. As Vermont businesses are geared up to launch marketing campaigns with traditional paid ads supporting their local newspapers, radio, and television stations, they have also turned to social media tools to entice customers to buy products or visit their retail locations.

For example, digital innovations boosted Lawson’s Finest Liquids’ ability to build and maintain relationships with its customers. Lawson’s Finest is known for producing high-quality craft brews, like their Sip of Sunshine IPA and unique maple brews. But as they continue to build their brand and reach, they’re using Facebook Live to regularly host conversations with their customers and answer their questions. And they’re promoting their “Tuesday Tunes” and “Open Mic” nights via Facebook Events.

Additionally, at the pandemic onset, they pivoted to online sales through their website and developed a curbside pick-up service to support their retail business which made some customers more comfortable not to have to go into a retail outlet. Lawson’s Finest even used their digital communications channels to launch a brand-new brew – Little Sip IPA – during the pandemic. By using creative promotional giveaways and scavenger hunts they were able to connect directly with fans to encourage them to try their new beers.

As with many specialty food businesses, Lake Champlain Chocolates maintained operations throughout the pandemic, providing consistent employment for their long-time staff as well as continued support of the broader community by using locally sourced ingredients like Vermont honey and maple syrup in their handcrafted products. Lake Champlain Chocolates has been hosting virtual chocolate tastings via Zoom, something that has caught on with corporate groups. They added new digital features to their website to provide a better virtual shopping experience for their customers and are promoting “order online pick up in-store” purchases through local Google pay-per-click campaigns, OTT (over-the-top) advertising through streaming video, paid social media, and local digital advertising like Front Porch Forum.

Deploying marketing tactics over social media to attract new employees has also gained momentum, especially with holiday sales ramping up. There are many holiday season employment opportunities, and Vermont’s employers are turning to LinkedIn, Facebook Jobs, and Indeed to connect with job seekers.

Vermont’s businesses fuel our economy by offering quality goods and services while at the same time providing good-paying jobs. These employers also provide financial benefits that in turn help to create sustainable and engaging communities. Our hope is that this holiday season, and beyond, Vermonters and tourists alike go out of their way to support our local businesses as they are an integral part of our greater community.

While supporting Vermont’s retailers, restaurateurs, and other businesses during the pandemic has been incredibly important, it’s even more vital to support the surviving small businesses now. There are plenty of ways our small businesses offer virtual engagement and shopping, so go find them online. This holiday season, you can support Vermont businesses in person – or right from your home.

Amy Spear

 

Amy Spear, of Killington, is the Vice President of Tourism at the Vermont Chamber of Commerce, whose mission is focused on creating an economic climate conducive to business growth while enhancing Vermont’s quality of life.

An Update on the Employee Retention Tax Credit

An Update on the Employee Retention Tax Credit

There are a lot of moving pieces affecting the restaurant industry. Here is an assessment with our federal partner, the National Restaurant Association (NRA), of the key issues and what is being done to keep the industry moving forward.

Employee Retention Tax Credit

Watch the NRA’s latest 90 Second Update for an update on the status of the Employee Retention Tax Credit (ERTC). The ERTC was redesigned with input from the NRA and has the potential to be a critical recovery tool for tens of thousands of restaurants. But, as we move closer to the end of the year, many restaurants have yet to see their refund checks from the IRS.

Earlier this month, the NRA wrote the Treasury Department and the IRS with a series of asks to get the ERTC process moving and to protect vulnerable restaurants that will soon owe January tax payments. 

The NRA is meeting with Treasury officials soon and would like to walk in with a petition that demonstrates how important this issue is to the restaurant industry. If you have 30 seconds, please review the petition and add your name

Replenishing the Restaurant Revitalization Fund (RRF) remains a top priority. If you haven’t contacted your elected official in Washington, D.C., now is the time to do so.

Impact of “Build Back Better Act” on Restaurants

Impact of "Build Back Better Act" on Restaurants

The $3.5 trillion “Build Back Better Act” makes important investments in things that will benefit our country and the restaurant industry. But the bill does not replenish the Restaurant Revitalization Fund (RRF), and it raises taxes on small businesses at a time when the restaurant industry truly cannot bear more financial strain. Watch the NRA’s 5-minute explainer video to learn how the tax changes would affect your bottom line.

To compound this, a new NRA survey of the state of the industry highlights the outlook that a recovery from the pandemic could be prolonged well into 2022. The NRA released a letter to congressional leaders sharing the survey and their strong objections to the Build Back Better Act as written. 

Congress must hear from restaurants to ensure RRF receives more funding. Reach out directly to Senator Patrick Leahy and Senator Bernie Sanders and tell your story, or use this form to send a note to Vermont’s Congressional Delegation. Additionally, you can help bolster Vermont Independent Restaurants’ (VTIR) advocacy for the replenishment of the Restaurant Revitalization Fund by signing this petition.

National Food Safety Month

National Food Safety Month
September was National Food Safety Month with the National Restaurant Association and ServSafe. This year’s theme was Know Safe & Show Safe and programming highlighted cleaning, sanitizing, and disinfecting standards with five weeks of education.
 
Week 1 – Cleaning vs. Sanitizing vs. Disinfecting: Learn more about what it is, when it needs to be done, and best practices on how it should be done.
 
Week 2 – Cleaning and Sanitizing Equipment: Learn more about best practices and how to create the habit of proper cleaning.
 
Week 3 – Cleaning and Sanitizing Dishes: Learn more about how to clean, dry and store cookware and tableware.
 
Week 4 – Cleaning and Sanitizing Your Operations: Learn more about best practices for cleaning after a guest gets sick.
 
Week 5 – Developing & Implementing a Cleaning Program: Learn more about what elements should you include in your Master Cleaning Plan.
 
Learn more about all of the programming covered during National Food Safety Month here.