Omicron Has Hurt Area Restaurants

After having closed its dining room for a year and then seeing business improve in 2021, Melissa Buchholz was looking forward to a promising year-end holiday business at her Milwaukee restaurant, Odd Duck.

Then, she says, “omicron hit us upside the head.”

Until recently, Odd Duck had seen very few staff cases of COVID-19. Buchholz and her co-owner, Ross Bachhuber, had closed indoor dining at the restaurant even before the statewide closing order came down in late March 2020, and kept it closed through the rest of the year even after the Wisconsin Supreme Court canceled the state order that May.

After COVID-19 vaccines became available in the spring of 2021, Odd Duck reopened dining with indoor and outdoor options for customers. When cool weather returned this past fall, the establishment stuck with indoor dining.

Over seven days in December, 10 of the restaurant’s 26 employees were diagnosed with COVID-19 — very likely contracted during family visits at Thanksgiving and afterward, Buchholz says. It was the start of a massive surge in the latest version of the coronavirus, the rapidly spreading omicron variant.

Buchholz swallowed hard, canceled Odd Duck’s planned New Year’s Eve reservations and closed for the week after Christmas. “We needed to stop,” she says. “We needed to reevaluate what we’re doing, because what we were doing was working, and now all of a sudden it wasn’t.”

For many in the hospitality industry — businesses that were among the hardest hit by the COVID-19 pandemic — the year-end to early January crash was a nerve-wracking disappointment.

Nationally, the Independent Restaurant Association, a trade group for locally owned establishments, reported that nearly three out of five member businesses saw sales fall by more than half in December, 2021. Four out of five cut their hours of operation.

The National Restaurant Association, which includes chain-operated as well as locally owned establishments, reported similar trends in its own survey, which found that four out of five restaurants in Wisconsin saw a dip in dining in the last weeks of December and the beginning of January.

Nearly half cut back on the number of hours per day that they were open and more than a third closed for one or more days that they would have normally operated.

“The economic devastation that happened to our industry starting back in 2020 is still wearing on a lot of folks,” says Susan Quam, Wisconsin Restaurant Association executive vice president.

Widespread impact

While there were differences from one part of the state to another, the omicron crash was widespread.

AJ Dixon, the owner and chef at Lazy Susan in Milwaukee, reopened to in-person dining in June 2021 after surviving on strictly take-out service for the first 14 months of the pandemic.

From June through October, business got better, Dixon says. November — often a slower month anyway — a decline started. And after she had hoped for a strong December, the receipts came in about $8,000 below normal.

“The Thanksgiving surge [in COVID cases] was the start of it,” Dixon says. “It gave people the urge to pull back, not doing as much as they normally do in December.”

When two employees contracted COVID-19, “I shut down early out of an abundance of caution,” Dixon says. Lazy Susan briefly returned to take-out only service, then started its planned winter break a week early, shutting down from Jan. 8 through Feb. 8.

TJ Semanchin owns Wonderstate Coffee with locations in Viroqua, Bayfield and Madison. “December was okay,” he says. “I think people pushed through the holidays with decent optimism, and sales seemed to be carrying us through.”

The new year wasn’t so happy. “January landed with a big thud for sure,” Semanchin says. And not just for sales. “It just kind of sucked the life out of staff morale as well.”

Some in the industry were more fortunate.

At Hinterland Brewery in Green Bay, co-owner Michelle Tressler says the anticipation of a Green Bay Packers playoff run helped bring out customers. In December, “we were tracking 2019 numbers and a little bit better at times,” she says.

The Packers’ good late-season run and a high demand for private events also kept business strong. Hinterland’s large space made it possible to keep customers and customer groups distanced.

Hinterland “tried to provide an environment where any degree of sickness and illness was discussed,” says Tressler. The business invested in rapid test kits and administered them to employees with symptoms of upper respiratory illness.

“We had a number of people sick in November and December,” she adds. Many tested negative for COVID-19, but if they were symptomatic were also kept off the schedule. “Nobody wants to have sick people serving them in any capacity, whether it’s COVID or not.”

In the first two weeks of January, the brew pub closed for lunch on weekdays and early on Sunday nights as well. “We saw it as an opportunity to rest our staff,” Tressler says. “It allowed us to only schedule one shift.”

Across the state, staffing shortages have been ubiquitous. “In Viroqua we’re not even open seven days a week — we’re closed mid-week, and that’s purely because of staffing,” Semanchin says.

Buchholz and Dixon both require employees to have the COVID-19 vaccine. At Odd Duck, Buchholz began asking customers to show proof of vaccination with the omicron surge.

“We couldn’t afford to stay closed and pay our people,” Buchholz says, but she saw a vaccine requirement for customers as a way to keep employees safer. The restaurant closed after this past weekend for a move to a new location in Milwaukee’s Third Ward neighborhood, with plans to reopen in May.

Short-term aid, long-term support

The unexpected surge as the year turned underscored one priority for the industry: replenishing the federal fund to help establishments make up for the losses that have been buffeting them through the course of the pandemic.

The Restaurant Revitalization Fund, an aid program that was part of the American Rescue Plan Act enacted last year, was quickly drained in the crush of early applications. Shawn Phetteplace, midwestern regional manager for Main Street Alliance, a small business advocacy group that includes a number of independent restaurants among its members, says the organization is watching negotiations in Washington on legislation that could replenish the fund.

Main Street Alliance opposes recent bills in the Legislature that would weaken or override vaccination mandates. “This is wrong-headed and would hurt local Main Street small businesses,” Phetteplace says. “The best thing anyone in our state can do to help small businesses is to get vaccinated and to encourage others to get vaccinated.”

Expanding vaccination can relieve customers’ fears about going out in public and potentially being exposed to the virus, while also helping to address staffing shortages, he adds.

Francesca Hong, who is a state representative for Madison as well as a chef and co-owner of Morris Ramen, says the increase in COVID cases in December reinforced principles she has embraced for government-funded paid leave and medical programs.

Many smaller restaurants have margins too small to cover those benefits themselves, and recent inflation driven by continued shortages has driven up their costs, Hong says. But providing workers with adequate pay and support is essential to ensure the jobs are sustainable, she argues.

Toward the end of December her restaurant experienced its first positive COVID-19 case and closed for a week to reduce the risk of spread. “It’s a hazardous job, so we knew we needed to take care of the staff that we had,” Hong says. The experience “enforced that health care is absolutely a right.”

That sort of support can “level the playing field for operators who really do care about the well being of their employees as a means to be able to succeed in this industry,” Hong says. Investing in workers can help sustain the industry, she adds “But they cannot just fall on the employers to raise wages, when we have costs going up that are out of control.”

Omicron punched the hospitality industry just when things were getting better was originally published by the Wisconsin Examiner.