Colorado Springs restaurants grapple with labor shortages and inflation | Company


Almost everyone has experienced it—waiting for service—whether in a grocery store, department store, or drug store.

And many people know why – employers are struggling to find workers amid what has been called the Great Resignation. Last year, about 47 million Americans quit their jobs by retiring early, starting their own businesses or seeking greener pastures, according to the US Bureau of Labor Statistics.

But perhaps no shortage is more noticeable than in restaurants.

Among Colorado restaurant owners, 64% say their restaurants don’t have enough employees to meet customer demand, said Denise Mickelsen, director of communications for the Colorado Restaurant Association.

“We’re hearing that it’s harder to find and retain employees now than it has been at any time since the pandemic began,” Mickelsen said.

That’s true for Jake Topakas, owner of Jake and Telly’s Greek Tavern in Old Town Colorado. After having to keep his store closed on Mondays and Tuesdays due to a lack of staff during the summer months – the busy season for Old Colorado City and the restaurant in Topakas – he hoped to reopen seven days a week.

But then two cooks and a dishwasher quit.

“It’s like something I haven’t seen in 25 years of doing this,” Topakas said. “We have a new guy, we’ll hang on to them for a bit, and then the next thing you know, they’re gone. They don’t come to work on time, they don’t call, they don’t show up.

Topakas said due to the instability of its workforce, its core of dedicated employees cannot meet some of the demands of the job.

“We always did everything from scratch here at home, we were very proud that the dessert was like this,” Topakas said. “And we still do, but I had to add two purchased desserts that are made in a factory somewhere because my staff who are here can’t keep up.”

Topakas is about 30% away from being fully staffed.

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

Topakas emphasized his need for support staff the most.

This is also the case of Baillie Richardson, manager of Dos Santos, a taco shop established for four years on East Moreno Avenue, in downtown Colorado Springs.

In the past, “sometimes I would get up to 30 applicants overnight,” Richardson said. “…now I get one or two a day, maybe five tops a day.”

As a small business, Richardson said it’s hard for Dos Santos to keep up with the incentives big companies can offer.

“It’s harder to get people interested, because there are so many different places trying to offer so many things,” Richardson said.

That’s why Dos Santos recently raised his salaries, Richardson said; this, she said, helped keep more experienced personnel on board.

The taco shop also tries to give employees enough time off.

“We offer quite flexible hours and are very accommodating with what people need,” Richardson said.

“…We’ve kind of created a culture where if you need time off to be away from here, another person will step in and when it’s time to be away, you’ll help them out.”

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Richardson said Dos Santos typically looks to downsize in the fall, but the restaurant is understaffed due to some employees graduating or changing careers.

“I think after spending so much time at home, people realize how important work-life balance is,” Richardson said. “And maybe they’re trying to find a place to live or whatever – a career that brings them more joy than they had in the past.”

In addition to labor shortages, restaurateurs are frustrated by runaway inflation. Rising wages are just one of many rising costs Bob Rusnak faces in operating five Dickey’s Barbecue Pit locations in Colorado Springs, as well as several others elsewhere on the Front Range.

“We pay more than double what we paid (last year) to buy our pork ribs, briskets and butts,” Rusnak said. “…We are a value proposition to our customers and we cannot raise prices fast enough or high enough to cover that.”

For restaurateurs who have weathered the pandemic, inflation and labor shortages are hampering a hoped-for recovery as COVID-related lockdowns and public health mandates have fallen into the rearview mirror.

A recent National Restaurant Association poll found that 46% of Colorado operators say business conditions are worse now than they were three months ago, mostly due to rising food costs, labor and other operational costs, Mickelsen said.

The pre-tax profit margin is around 5% for a typical restaurant. Higher operating costs — food prices up 21.8% from 2019, labor costs up 18.3% — are unsustainable for most restaurants, said Mickelsen.

“So when you go out to your favorite local restaurant, be kind and patient with the people serving you,” Mickelsen said. “They do their best to provide you with excellent service with a small team.”

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