Colorado Springs restaurants battle labor shortages and inflation | Business

Most people have experienced — waiting for service — whether at a grocery store, department store, or drugstore.

Many people know why – employers are having a hard time finding workers in what’s called a “big resignation.” According to the U.S. Bureau of Labor Statistics, some 47 million Americans left last year for early retirement, starting a business or seeking greener pastures.

But perhaps no shortage is more apparent than restaurants.

Dennis Mickelson, communications director for the Colorado Restaurant Association, said 64 percent of restaurant operators in Colorado say their restaurants don’t have enough staff to meet customer demand.

“We’re hearing that finding and retaining employees is harder now than at any time since the start of the pandemic,” Mickelson said.

Such was the case with Jack Topakas, owner of the Jack and Terry Greek Tavern in Old Colorado City. Due to understaffing during the summer months (peak season for Old Town Colorado and Topakas restaurants), he had to close the store on Mondays and Tuesdays, and he hopes to reopen seven days a week.

But then two cooks and a dishwasher pulled out.

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“It’s like nothing I’ve seen in 25 years,” Topacas said. “We got a new guy, we’d stick around for a while, and then you know, they’re gone. They didn’t come to work on time, they just didn’t call and didn’t come to work.”

Topacas said his core workforce was unable to meet some of the demands of the job because of his unstable workforce.

“We’ve been making everything from scratch at home, and we used to be really proud of the way desserts go,” Topacas said. “We still do, but I do have to add two purchased desserts, which are Made in a factory somewhere, because my people are here and they can’t keep up.”

Topakas is about 30% less staffed.

“It was a very frustrating year of my life,” he said.

Topacas has most stressed his need for a behind-the-scenes crew.

So did Baillie Richardson, manager of Dos Santos, a taco shop on East Moreno Avenue in downtown Colorado Springs that has been in business for four years.

In the past, “sometimes I’d get as many as 30 applicants overnight,” Richardson said. “…Now I get one or two a day, maybe five a day.”

As a small business, Richardson said, dos Santos has had a hard time keeping up with the incentives big companies can offer.

“It’s hard to find people who are interested because there are so many different places trying to offer so much,” Richardson said.

That’s why dos Santos recently raised wages, Richardson said. It helps retain more experienced staff, she said.

Taco shops are also trying to give employees enough time off.

“We offer a very flexible schedule and are very adaptable to people’s needs,” Richardson said.

“…We kind of created a culture where if you need time off to get out of here, another person gets involved and you help them when it’s time for them.”

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Richardson said dos Santos typically seeks layoffs in the fall, but the restaurant is short on staff as some employees are graduating or changing careers.

“I think after people spend so much time at home, they realize how important work-life balance is,” Richardson said. “Maybe they’re struggling to find a place to live or wherever possible – a career that will bring them more joy than they have in the past.”

In addition to worker shortages, restaurateurs are frustrated by rampant inflation. The wage increase is just one of the many cost increases that Bob Rusnak faces when he runs five Dickey’s Barbecue Pit locations in Colorado Springs and multiple locations elsewhere in the Front Range.

“We paid more than double what we used to pay for ribs, brisket and pork chops in the past (last year),” Rusnak said. “…We’re a value proposition to guests and we can’t raise prices fast enough or high enough to make up for that.”

For restaurateurs weathering the pandemic, inflation and worker shortages are holding back a hoped-for recovery as COVID-related lockdowns and public health orders come into the rearview mirror.

Mickelson said a recent National Restaurant Association poll found that 46 percent of Colorado operators said business conditions are worse now than they were three months ago, largely due to higher food, labor and other operating costs.

The pre-tax profit margin for a typical restaurant is about 5%. Mickelson said higher operating costs — food prices are up 21.8% from 2019 and labor costs are up 18.3% — are not sustainable for most restaurants.

“So, when you go to your favorite local restaurant, be kind and patient with the people serving you,” Mickelson said. “They are doing their best to provide you with great service with a lean team.”

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