Amid uncertainty, Iowa restaurants and bars struggle to hold on

Data: The typical $4.4B industry lost $1B in six months

A worker sanitizes a table Saturday at the NewBo City Market in Cedar Rapids. Julie Parisi, director of business develop
A worker sanitizes a table Saturday at the NewBo City Market in Cedar Rapids. Julie Parisi, director of business development for the market, said the space, which is a nonprofit, normally attracts extensive foot traffic through events, which have been mostly canceled or curtailed. “The shopkeepers we lost — it was really them looking into the future, and the writing was on the wall.” (Andy Abeyta/The Gazette)

Jason Wilkerson resisted opening the dining room of his Cedar Rapids restaurant, The Local Craft Ale House, for several weeks after the governor in May eased restrictions for dining in.

Carryout business since the March 17 state-mandated shutdown to counter the spread of the coronavirus had been brisk, and he hoped that would be enough to sustain the restaurant.

It wasn’t. As other restaurants reopened, carryout business dropped off and he realized he couldn’t keep the business going unless he opened the doors. It was not an easy decision.

“I have severe asthma. I don’t know how I would fare, dealing with a bout of coronavirus. Everyone who works here are my friends, and I don’t want any of them to get sick,” he said. “I’m not comfortable with it. Having to go home to four children, I’m not a huge fan of being indoors and around a bunch of folks, not knowing who may or may not be ill. But it’s a fine line between feeling safe and staying in business ... It was ultimately open up inside or close altogether, and that would be the end of my business, my livelihood.”

He’s not alone. Restaurants and bars across the state are struggling to stay afloat, six months into the pandemic’s arrival in Iowa.

Jessica Dunker, president and chief executive officer of the Iowa Restaurant Association, said the association’s data shows the restaurant and bar industry in Iowa, normally a $4.4 billion-a-year industry, has lost about $1 billion in sales over the last six months.

She said the association projects about 1,000 Iowa restaurants and bars will close by March 15, 2021 — or about 18 percent of all the bars and restaurants in the state. That number is based on surveys, she said, and is lower than what other groups have projected nationwide.


She said the National Restaurant Association projects closer to 25 to 30 percent of restaurants and bars will go under across the country.

“Honestly, I’m tearful every day,” Dunker said. “When 15 to 18 percent closure rate is optimistic and better than the national average, that tells you the dire straits the industry is in across the country.”

She said Iowa’s numbers may be lower than the national projections because of state government initiatives included allowing the sale of cocktails-to-go, and grants from the Iowa Economic Development Authority helped some businesses before federal assistance such as the Payroll Protection Program began.

Bars hit again

After an August spike in infections in the state, Gov. Kim Reynolds ordered bars in six counties to close again at least through Sept. 20.

Applications for a second round of $10,000 state grants for bars ordered closed began today and continues to Sept. 24.

Haley Flenker, co-owner of Thew Brewing in Cedar Rapids, said she applied for a grant in the first round but didn’t receive one. She hopes to fare better this time. But she still needs to cover her bills from Aug. 27 until whenever that money may arrive. She is now dependent on carryout beer sales and sales to other bars and restaurants. She said between the pandemic and lost business after the Aug. 10 derecho, all of that revenue is down.

“This shutdown is a little bit different from the shutdown in March, when the only option was to get takeout. Now when everything else is still open, takeout is suffering; we’re not seeing as much traffic,” she said.

Matt Harding, general manager of Iowa Brewing Company in Cedar Rapids, said he wished there had been more vigorous enforcement of social distancing requirements at bars before the closure was mandated. He feels brewery taprooms like his are being punished for the actions of others.

“It’s frustrating to see 20 bikes pass our taproom on a Saturday afternoon wanting to stop for a beer, and they can’t. But then they go down the street and do the same thing elsewhere at somewhere that’s much the same as our taproom,” he said.

joy replaced by stress

Wilkerson said he wasn’t surprised by the second closure order and in fact was surprised restaurants weren’t also closed. He worries it could happen if infection numbers don’t fall.

“I’m ordering cautiously. Every decision I make right now is with it in mind, that we could potentially get told it’s back to curbside only,” he said. “If another full shutdown happens, there has to be a really, really good financial plan for this industry, or it will be the nail in the coffin.”

He said another issue he’s seeing is staffing. Despite high unemployment numbers in the state, he said many of his former employees have not wanted to come back.

He doesn’t blame increased unemployment payments — he said they were necessary to keep people going during the shutdowns — but is frustrated he is having trouble filling open jobs. He’s working some shifts with just himself, or himself and his wife, and is interviewing people this week, hoping to bring his staffing back up.

He said some of the joy of owning a restaurant has faded — his favorite part was socializing with guests and days when the restaurant was packed with people, scenarios that are now stressful. Now he has to tell guests they can’t move tables to sit together or they must wear masks when leaving their table.

“It puts us in a tough spot. You don’t want to be heckling your guests, but you’re trying to enforce strict policies in a space that’s supposed to be fun and relaxed,” Wilkerson said.

The derecho was another blow. It ripped a storage unit off the back of the building, destroying smokers and other equipment inside. The business has since reopened, but Wilkerson said he’s still going through paperwork with the insurance company, one more thing to juggle while short-staffed.

“It’s getting to the point where I don’t know if I can balance running a restaurant, post-derecho and mid-pandemic, and still be the father and husband I want to be. The balance is completely out of whack,” he said.

trying to hold on

Phoebe Charles, co-owner of Rodina in Cedar Rapids, said she gave up hope months ago of making a profit this year. For now, the goal is just to survive and pay the bills.

“The goal is just kind of to coast through the end of the year and to get through the winter. Hopefully next year we can pick back up and start making money again,” she said.


She said Rodina also saw carryout drop off after the initial spring fervor of supporting local restaurants.

“I think people took so much personal responsibility to support their local businesses when this all started, which was so cool, but not everybody can do that. I understand it,” she said. “People are just trying to also get through this however they can. I have no ill feelings toward our community for our sales dropping, I just think it is what it is. ... At this point, it’s just about coming to peace with whatever happens while still fighting.”

At NewBo City Market in Cedar Rapids, several shopkeepers, including One More Bite, City Melt, Get Fresh and Paulita’s Pastries, have closed their stalls since March, with another, Smoke’n Pitts BBQ, scheduled to close Sept. 27. Some remain going in other forms — One More Bite has a food truck, and Get Fresh has an Iowa City location.

Julie Parisi, director of business development for the market, said the space, which is a nonprofit, normally attracts extensive foot traffic through events, which have been mostly canceled or curtailed.

“The shopkeepers we lost — it was really them looking into the future, and the writing was on the wall. They knew we were canceling events and consumer behavior was going to change in such a way that it maybe wasn’t going to make sense to stay in business,” Parisi said.

Winter is coming

So far, Dunker said, the industry has seen some closures like those at the market but has avoided many more by relying on things like increased carryout and delivery and expansions of outdoor seating, with many cities making it easier to open patio space. But she worries about those options ending with colder weather.

“We are looking at as many ways as we possibly can to help people feel safe coming into restaurants and bars,” she said. “Winter is coming.”

Dunker said more needs to be done to help restaurants survive. She would like to see a grant program to help businesses recover the cost of inventory they lost when they had to shut down suddenly. She would also like to see tax relief — not just deferral — for businesses that were ordered closed.

“It’s not giving people money but stopping them from having to pay out money. Deferrals can provide relief in the moment, but this has gone on and on,” she said. “There are 155,000 people in the state working in the hospitality industry — it’s the second largest employment sector, with one in nine Iowans. Saving it has to be worth it.”

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