In Greater Grand Forks, 20 restaurant closures over past three years, but statistics don't indicate trouble

Apr. 19—GRAND FORKS — On any given day at the Blue Moose, Pat Boppre probably is roaming the restaurant, working with staff and visiting with customers.

In the kitchen, Nate Sheppard is tasked with quality control, monitoring the food that's about to be served and tracking data related to the company's bottom line — the fluctuating price of chicken, for instance.

At times, the wait for a table might seem longer and the menu might change. Yet the co-owners of the iconic East Grand Forks restaurant alongside the Red River say their customers generally understand that in the years after the COVID pandemic, things can be just a little different at Greater Grand Forks' favorite eateries.

"Labor was really hard to find during (the pandemic). You had to be creative and you were forced to change your business model," Boppre said. "Now, I feel things have settled down. Labor is a little easier to find and food costs are starting to get back in balance. There were a lot of obstacles."

Boppre and Sheppard say the Blue Moose has endured because of a dedication to customer service, a close eye on the bottom line and always striving to follow the company goal of, in the words of Sheppard, "great deals, great food, great atmosphere."

A number of local restaurants haven't been so fortunate. Since the spring of 2021, as many as 20 — and possibly more — restaurants have closed in Greater Grand Forks, including

the March shuttering of the trendy Vinyl Taco

on South Columbia Road.

Vinyl Taco's closure came suddenly. It was open to customers in the first days of March, but by March 7, a sign on the door offered a blunt one-word statement: "Closed."

Judging by other recent closures, Vinyl Taco's demise shouldn't necessarily be surprising. Others include

Mama Maria's

(March 2021), East Grand Forks Burger King (2021),

Sickies

(August 2021),

Scotty's Deli

(January 2022),

HuHot

(January 2022),

Wild Bill's Sports Saloon

(May 2022),

Denny's

(March 2022), Joe's Diner (September 2022),

Famous Dave's

(February 2023),

Big Foot Barbecue

(May 2023), Pita Pit (May 2023),

Grand Forks CherryBerry

(July 2023),

Rhombus Guys Brewing Company taproom

(July 2023),

Burger King on Gateway

(2023), Red Shed Smokehouse (September 2023),

Boardwalk Bar and Grill

(January 2024), Mo's Cafe (2024) and La Cantina (spring 2024).

Crooked Pint Ale House, a restaurant/pub that opened in 2017 next door to Vinyl Taco, has been closed since a fire last July. Its owner

told the Herald in September

that it planned to reopen, but it has not yet. Messages left earlier this week with its ownership group were not returned.

Also, French Taste Creperie posted on Facebook last April that it is temporarily closed, and no update has been made since. A listed telephone number appears to be out of service.

And just this month, Half Brothers Brewing Company

announced it has closed its pizza kitchen

indefinitely. Owner Chad Gunderson said it is no longer feasible for him to run the kitchen — he also is head brewer and a local firefighter — as staffing woes continue.

Importantly, Half Brothers is still open and serving its wide selection of brews, but without its pizza kitchen.

When the Boardwalk Bar and Grill closed in January, co-owner Dan Stauss said staffing was a big problem.

"There's an extreme shortage of people — cooks, waitresses, everybody," Stauss said. "The virus has caused, I think, a shortage of labor, and it's not getting any better. In fact, if you ask me the question, it's going to get worse."

Rudie Martinson, executive director of the North Dakota Hospitality Association, said the top challenge facing restaurants — and most any industry in the state — is indeed workforce, i.e. finding workers. "That's the first thing that comes out of everybody's mouth, and it's no less true for the hospitality industry," he said.

After that, however, "the profit margin on a restaurant is slimmer than in a lot of other industries."

That means "it takes a lot of persistence and careful watching of dollars and skilled management to be successful in the restaurant industry, in addition to producing a product, an atmosphere and an experience that people want to come enjoy," he said.

The pandemic presented unique challenges, he said, and some restaurants might finally be putting those challenges behind them.

Local restaurant closures could be related to a number of issues, said Grand Forks/East Grand Forks Chamber CEO and President Barry Wilfahrt, but the most obvious probably is the bottom line.

"First of all, restaurants are running on tight margins and their cost of goods, cost of supplies, have all been affected by inflation significantly. It changes from week to month and those costs are hard to pass on to the customer," Wilfahrt said. "Some can weather it better than others, but we have seen some restaurants that have decided they aren't going to work in that kind of environment."

Further, Wilfahrt said, workforce and supply chain issues probably aren't helping.

"There are some strong headwinds right now in owning a restaurant," Wilfahrt said. "It's not for everybody, and I think that's why you're seeing some churn in that industry."

As vice president for research at Praxis Strategy Group, Mark Schill works as a community strategist, an economic analyst and economic development consultant. He pays attention to Greater Grand Forks' economic trends.

Schill said despite recent closures, associated statistics don't necessarily indicate great troubles in the local restaurant industry. Restaurants have been opening and closing in Greater Grand Forks for years, but perhaps it just seems like it's happening more often now, he said. Community chatter could be stoking the belief that it's happening at a higher rate.

"One thought I have is it might be confirmation bias. It's human nature to think of what is closing versus what is opening," he said.

Martinson agrees, saying people notice when a restaurant closes — especially abruptly — but there isn't much written about the restaurants that remain open and are excelling. He provided statistics that show the restaurant industry is the third largest private employer in North Dakota, generating some $2 billion in sales. The industry's 38,600 jobs at approximately 1,800 locations make up 9% of the total jobs in the state.

"I think there is possibly a greater perception of overall lack of health in the industry than there is in reality," Martinson said. "When people see their favorite restaurant close, well then they think 'is the rest of the industry OK?' By and large, I think it is. And if anything, I think we're getting back closer to normal, to pre-pandemic levels."

Schill said statistics show the number of restaurants in Polk and Grand Forks counties has been stable. Twenty years ago, there were 212 food/drink establishments in the two-county area. The number fell to 201 in 2009, but has hovered around 220 since 2017. There were 218 in 2021, 222 in 2022 and 223 in 2023.

Full- and part-time employment in the Greater Grand Forks food/drink sector has been approximately 4,000 since mid 2021. That's down from roughly 4,500 prior to the pandemic, Schill said, but basically flat since. There are more food/drink workers in Fargo-Moorhead, but a chart compiled by Schill shows the F-M metro's statistical trend line roughly mirrors Greater Grand Forks' line after both metros saw a great dip during the pandemic.

Another statistic — revenue generated by the city's food, beverage and lodging tax — further spoils any argument that the local restaurant industry has hit hard times. In February, the quarter-percent tax raised $72,996, up 53.5% from February 2023's $47,550. Over 12 months, revenue from the tax rose 14.63%.

Prices, driven by inflation, could theoretically be pushing the city's tax collections, Schill said, but the rise in tax revenue is still "a notable increase."

Since February 2021, average hourly wages in the Grand Forks metro have risen more than 25%, which "should be a positive indicator for restaurant activity," Schill said.

So again, nothing in the data suggests a decline in the industry, he said, although it "doesn't mean that individual businesses are not struggling." Schill, who acknowleges he is not an expert in the restaurant industry, also noted the shrinking number of employees coupled with higher wages over the past three years. The "structural shifts" in the sector could be causing business model disruptions similar to changes in the newspaper industry over the past 25 years, he said.

"I agree that there seems to be a prevailing narrative in the community that there is an increase in restaurant closures. However, when this is mentioned on social media, there is almost never an accompanying discussion of restaurants that may have opened during the same time," he said.

He continued: "What is the churn rate of local restaurants? Is it higher now than past years? How does the churn rate here compare to other places? Until we can answer these questions, it's tough to assess this issue. Thinking about the local narrative, loss aversion is a powerful human behavior. We will often over-weight the downside or loss of a situation compare to a positive occurrence or potential gain. This pattern seems to be reflected in the local social media discussion about restaurants."

And just by "looking at the data, I don't really see a decline," Schill said, adding later that "economic data takes time to collect, so a shift could have happened in the past one to two months."

At the Blue Moose, Boppre and Sheppard have enjoyed consistency and loyal customers. They say some restaurants may be operating with such a thin margin that any sort of change — from inflation to dips in patronage — can have dire consequences.

"We have a bit more of a grace period because of sheer volume," Sheppard said.

Purchases at the Blue Moose are made in surprising quantities. For instance, the restaurant annually serves 46,000 pounds of french fries. Fries are purchased on contract — meaning the price doesn't fluctuate over the course of months — but other products, such as chicken, can see big swings. Blue Moose only serves fresh chicken, Sheppard stresses, so sometimes the restaurant has to eat higher costs as it waits out unfavorable pricing trends.

That's easier to do at bigger restaurants, where hundreds might dine daily.

At one point, fryer oil was selling for $18 to $20 per 35-pound jug — sometimes $15 on sale, Sheppard said. In the months after the start of the pandemic, it rose to $45 to $50 per jug. Prices of some other oil-based products — mayonnaise, cooking spray and the like — rose correspondingly. When prices fluctuate, it can lead to menu changes; in turn, that can lead to customer frustration.

Still, Sheppard disagrees that the industry is fickle, as long as restaurants offer a good product and back it with acute attention to detail and service.

And "don't rest on your laurels," he said.

Extenuating factors mean menus and pricing sometimes change, but attention to details and the environment don't have to, the owners say, adding that the Blue Moose will continue to be — as its motto understates — "a place in East Grand Forks."

"I love this industry. I get bored very easily and in this industry, you have to be on your toes all the time," Boppre said. "It's downright fun, seeing smiles on customers' and co-workers' faces. It's fun to be around the social aspect while providing great service."