The head of a state restaurant association on Monday addressed local industry leaders about the ongoing struggles in the industry and the changing landscape of eateries across the state.
Jessica Dunker, president and CEO of Iowa Restaurant Association, spoke to a crowd of about two dozen during a “Leaders Over Lunch” event at Hotel Julien Dubuque hosted by Dubuque Area Chamber of Commerce.
The gathering marked the first of multiple such events, which will invite local representatives from a variety of economic sectors to attend intimate sessions focusing on industry-specific issues.
Chamber President and CEO Molly Grover emphasized that local restaurants and bars have dealt with major challenges of late.
“Enjoying a meal with friends or family in a restaurant has looked a lot different in the past year than it had in years before,” she noted. “It is a simple pleasure that we took for granted.”
Dunker pulled few punches while assessing the severity of the pandemic’s impact on restaurants.
She noted that Iowa officials estimated the state would permanently lose about 20% of its restaurants and bars — or about 1,000 locations overall — because of the pandemic. Revised estimates place that number closer to 800 permanent closures, a grim figure that looks only slightly better when considered in the broader context of national struggles.
“We did far better than others, which are looking at permanent closures as much as 50% in some states,” she said.
National revenue at restaurants was projected to be about $900 billion entering 2020, but the actual figure was $659 billion, Dunker noted. Industry experts currently predict the industry will generate $731 billion nationally this year, reflecting an improvement over 2020 but a struggle to return to pre-pandemic levels.
The pandemic also led to the reversal of some trends.
In 2019, for instance, national figures showed that 51% of consumers’ food dollars went to restaurants. Current numbers place that at 46%, showing that, after years of moving in the opposite direction, consumers are beginning once again to spend more money on grocery items than they do at bars or eateries.
Specific types of restaurants have been in the crosshairs more than others.
Dunker explained that the state lost a lot of “legacy places” — eateries that were long owned by the same family and operated in a small town — because of the pandemic. She expressed fears that these closures could leave a permanent void, noting that new entrepreneurs would be slow to fill vacancies in small markets where it didn’t make “business sense” to open a new bar or eatery.
“What worries me is that we have created these restaurant deserts in the state of Iowa. … That is going to be our challenge moving forward,” she said.
Aaron Hefel, owner of The Lift music venue and bar in downtown Dubuque, attended Monday’s lunch. He emphasized that he always has taken COVID-19 restrictions seriously at his business.
Out of an abundance of caution, he waited until this month to bring back live music to the venue. And while he hoped that live entertainment would be a shot in the arm for the venue, rising COVID-19 caseloads and changing governmental policies have stoked fears that further setbacks could await.
“I’ll follow any restrictions (that are put forth) because I do not want to get anybody sick,” he said. “But if we return to half-capacity or to (mandates to wear) masks or anything like that, that would be like kicking our business while we’re already down.”
Dunker on Monday praised state efforts to support the restaurant industry but directed harsh words at the efforts — or lack thereof — from federal leaders.
“The federal government was willing to let small businesses perish,” she said.
Efforts remain in motion to direct more federal assistance to Iowa eateries and bars.
Ryan Sempf, vice president of government and external affairs for the chamber, noted that a federal effort known as the Restaurant Revitalization Fund was passed as a way to help make restaurants whole following the losses that resulted from COVID-19.
The fund initially had a little more than $25 billion in it, but more than $70 billion in applications poured in, leaving many qualifying businesses without their funds.
Sempf noted that the chamber is tracking efforts to replenish this fund with $60 billion and is urging federal lawmakers to support such efforts.
“These restaurants are anchors of their communities, and we know COVID is still impacting the way people spend money and is continuing to impact restaurants,” he said.