Industry: Over 1,000 New Mexico restaurants closed in 2 years

Aug. 18—For many restaurant owners in New Mexico, the 2020s have been more devastating than a kitchen grease fire.

The pandemic hit the restaurant business particularly hard, according to new data released this week by the New Mexico Restaurant Association. Using gross receipts reports from December 2019 through December 2021, the association says the state lost nearly 1,100 full-service restaurants in that time.

Carol Wight, executive director of the restaurant association, said the figure is 18 percent of the 5,775 dining establishments in operation in December 2019.

She called the number of closures in such a short time frame "historic," adding she believes 90 percent are related to the coronavirus pandemic.

"Sure, we are going to lose some [in any case], but the fact we lost 18 percent is huge," she said.

The closures affect jobs, she said — noting the data shows there were 96,000 jobs in the restaurant industry in 2019. That figure has dropped to about 75,000.

And supply chain issues — affecting many industries — are playing a role as well, she said. So have increased food prices because of limited supplies.

The result is fewer restaurants, plus fewer days and hours of operation for many that survive.

"If your business model requires people who you can't get, you either have to scramble or you open three days instead of five," said John Bradbury, executive director of the Greater Santa Fe Restaurant Association.

According to a Facebook post on the Santa Fe Bulletin Board, Piccolino Italian Restaurant on Agua Fria Street will begin closing on Saturday and Sunday, though it plans to expand its weekday operating hours. A phone message left at the restaurant was not returned Wednesday.

Bradbury, who works at the Santa Fe Wine and Chile Fiesta, said several board members of the organization who are restaurateurs spoke of the difficulty of finding workers in the wake of temporary restaurant closures and limited operations brought on by the pandemic.

"Those people who fill those positions have a lot of other choices now," he said. "They've learned there are other things you can do."

He said he knows of one restaurant owner who is now establishing a 401(k) program for his employees to recruit and retain workers.

The problem isn't just in New Mexico. A report issued by the National Restaurant Association earlier this year said 7 of 10 restaurant operators did not have enough employees.

Vanessa Sink, spokeswoman for the national association, cited another job-related problem associated with the pandemic. She said because of closures and limited hours of operation, the number of available jobs in the industry has dropped by 635,000 from February 2020.

"We still have not recovered from those job losses," she said.

Still, every month there are a half-million restaurant job openings waiting to be filled nationally, she said.

In New Mexico, Wight's association says 71 percent of restaurant operators do not have "enough employees to support their existing customer demand," according to the news release.

Sink said her association plans to issue a report Thursday showing 88 percent of restaurant operators report their food and beverage costs have increased since 2019 — another byproduct of the pandemic.

As a result, 65 percent of those operators said they have had to change food and beverage options on their menus.

The industry, she said, "is still in a hole."

The federal government in 2021 created the Restaurant Revitalization Fund — designed to provide $28.6 billion in direct relief funds to eateries that struggled because of the pandemic.

Wight said her association is working on drafting legislation to have New Mexico set up a similar aid package for restaurants and bars. She said it's too soon to provide details on the initiative, though she hopes to get some state lawmakers to sponsor and introduce the bill during the 60-day session scheduled to start in mid-January.

She said the data used in her report did not break down how many of the state restaurants closures occurred in rural or urban areas.

Some restaurants initially hurt by the pandemic are recovering. Alma Castro, one of the owners of Castro's Cafe, said Wednesday that besides cutting daily operating hours by one hour every day, the business is operating as it was before the pandemic.

The restaurant benefited from a $30,000 small business CARES Act relief grant issued in January 2021 by the New Mexico Finance Authority. At one point, Castro's had to cut its staff size from 22 to eight.

Now, she said, "We're fully staffed. We raised everyone's wages thanks to the CARES money."

But Castro said she has talked to other Santa Fe restaurant owners who "have trouble with retention" of employees.