Denver Restaurants Struggle as Costs Rise and Business Closures Mount
Denver, known for its vibrant dining scene, is facing a challenging year as more than 200 restaurants closed their doors in the city last year. The rising costs of running a restaurant, coupled with a sluggish economy, have made it increasingly difficult for business owners to survive in the Denver metro area.
According to Colin Larson, the Director of Government Affairs with the Colorado Restaurant Association, Denver typically sees a 5% growth in the number of new restaurants each year.
However, last year, there was a shocking 13% decline, resulting in the closure of over 220 restaurants in Denver alone. Larson predicts that this trend will continue in the coming year, spelling trouble for the local dining industry.
One of the major challenges faced by restaurants is the high inflation rate in Colorado compared to the rest of the country. This has led to increased costs for both restaurant owners and customers alike. Additionally, the industry is grappling with labor shortages, making it even more difficult for restaurants to operate efficiently.
Despite new state laws that have raised the minimum wage by almost a dollar, labor and staffing shortages persist. Larson highlights the tight labor market, particularly for skilled workers, which has left restaurants struggling to hire qualified staff even with higher wages on offer.
Full-service restaurants have been hit the hardest during the pandemic. Their higher labor and operating costs have made it challenging for them to stay afloat. As a result, many businesses are shifting to a quick service model to reduce labor costs and streamline operations.
Customers can expect to see price increases on menus or small service charges added to their receipts as restaurants try to offset rising costs. Additionally, restaurants may have fewer staff and limited or changed hours of operation, further impacting the dining experience.
Amid these challenges, Larson emphasizes that there is increased public awareness of the difficulties restaurants are facing. Customers are now more informed about the cost of labor and the impact of minimum wage increases. This awareness can potentially lead to more support for local restaurants.
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To provide some relief, new legislation is being considered to allow alcohol to go. This would benefit restaurants by enhancing their bottom line and providing an additional source of revenue. Those who have already implemented this practice have reported positive results, with the ability to turn a profit rather than operating at a loss.
In recent years, the Colorado Restaurant Association has also focused on apprenticeship programs, aiming to teach high school students culinary skills through culinary prep schools. The association plans to expand this program in the coming year, providing opportunities for young individuals interested in the restaurant industry.