Colorado restaurants lose millions in profit, reopen at 50% capacity

Colorado restaurants lose millions in profit, reopen at 50% capacity

Colorado eateries can now operate beyond delivery and pick-up services, but only at 50% capacity and with strict social distancing rules.

After nearly three months of limited services and store closures, Colorado restaurants are now allowed to provide indoor and dine-in services. The unprecedented impact of the COVID-19 pandemic, however, incurred millions of dollars lost for restaurant owners across the state.

On March 17, Governor Jared Polis asked all non-essential businesses to shut down, leaving restaurants, bars, casinos, gymnasiums, and cinemas with no choice but to close their doors.

Since then, reports of businesses losing big bucks in revenue, laying off employees, and practically on the rocks flooded Colorado.

Restaurateurs lose big time

Colorado restaurants are no exception. The Denver-based TAG Restaurant Group has reportedly lost US$7.5 million [AU$10.8 million] in profit within the 10 weeks of lockdown. The group owns restaurants in 12 different locations and is making nearly $3 million per month in revenue.

Chef Troy Guard, the owner of TAG, said the company is excited to reopen all its restaurants. Yet, at the same time, he is also worried about the current situation.

“There is no new normal yet. There is no normal right now. It’s an adjustment and it’s going to take time to really see how everything shakes out,” Chef Guard said told CNBC.

Another Denver-based restaurant group ChoLon Restaurants Concept said it lost about $1.2 to $1.5 million in profit beginning mid-March. The restaurant group also shared that, through its eateries across four locations, the company makes about $600,000 a month regularly.

Colorado restaurants lose millions in profit, reopen at 50% capacity

Both companies furloughed most of their employees as well during the pandemic. Chef Guard, however, said that TAG is looking to bring back all 623 workers he had to lay off.

ChoLon Concepts laid off an estimated 170 employees as well, but the restaurant group has not said anything about whether it will rehire furloughed workers.

On the other hand, the Colorado Restaurant Association’s latest survey shows that small restaurants are facing worse financial difficulties. The average revenue for 250 resto owners has plummeted by nearly 76% year-over-year within the lockdown period.

“There’s only so long until you’re going to see more and more restaurants closing permanently and going out of business,” CEO of CRA Sonia Riggs said in an interview with CNBC.

Colorado restaurants under the “new normal”

About two weeks ago, Governor Jared Polis had formally allowed eateries across the state to operate beyond delivery and pick-up services.

Under the state’s “new normal” guidelines, however, restaurants can only operate at 50% capacity. Employees are required to wear protective equipment such as masks as well. Party sizes are restricted to eight people maximum too, and tables must be placed six feet apart to ensure physical distancing.

If possible, restaurants should consider moving to outdoor dining instead of indoor. Denver, for instance, has temporarily allowed bars and restaurants to extend its operations through outdoor dining.

Outdoor dining provides better ventilation, as said by health experts. Hence, it has a low risk of spreading coronavirus further.

At the same time, restaurateurs worry whether they can bounce back even after the reopening. “The biggest thing is that we want to make sure that when we reopen, we don’t have to close again because if we close again, it’s kind of a death sentence,” Chef Guard shared.

Images courtesy of Pixel2013, Free-Photos/Pixabay

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