News

Taking aim at a restaurant recovery

BY SUSAN COTE 

Observer staff 

This past year has been tough for the owners and employees of Williston’s restaurants. Roughly two-thirds of the town’s 29-some eateries are independent or part of a small regional group. 

Williston’s restaurants, like their counterparts around the state and country, have faced tremendous challenges, including sharp declines in revenues and stringent new health guidelines to follow, since the outset of the COVID-19 global pandemic in March 2020 and the imposition of restrictions that are part of Gov. Phil Scott’s “Be Smart, Stay Safe” order. 

The Vermont Sandwich Company, located in Maple Tree Place, decided to close down in May 2020 due to pandemic-related financial hardship. It had been in business since 1996. 

Data from the Vermont Department of Taxes shows that for the two most recently reported quarters, April-June and July-September 2020, restaurant meal receipts in Williston were down 56.3 percent and 30.1 percent, respectively, versus the prior year. These figures were slightly worse than those for Chittenden County as a whole and worse than those for the state, which experienced declines of 45 percent and 26.6 percent year-over-year in taxable meal receipts for those same time periods. 

In dollar terms, Williston meal revenues in April-June 2020 were down over $5.6 million, and in July-September 2020 over $3.1 million versus the same periods in 2019. That’s a lot of dough, or sushi, or burgers. 

Because Williston exacts a 1 percent local option tax on rooms, meals and alcohol sales, business losses across all three of these categories had implications for the newly passed town budget. 

“For FY 22 we built the budget for the rooms and meals portion using the 3-year rolling average excluding 2020 data and applied a ‘COVID adjustment’ to decrease projected rooms, meals and alcohol tax revenue,” said Town Manager Erik Wells. “This ‘COVID adjustment’ graduated down each quarter in our budgeting model with the assumption that things would improve as we work further through the pandemic.” 

While the town also collects a 1 percent local option tax on sales, which is less volatile, this approach led the town to project slightly lower total local option tax revenue year over year, a reduction of $25,000, contributing to an overall projected town revenue decline of almost $100,000 or 0.86 percent. 

How are restaurants getting by? 

Many area restaurants have relied on take-out and delivery services to maintain some level of business. Some have closed for temporary periods or limited their days of operation. At present, the state’s restaurants may offer in-person dining at up to 50 percent capacity under strict conditions, including seating only one household per table, maintaining at least 6 feet between parties and ending table service by 10 p.m. On Tuesday, Gov. Scott indicated he plans to announce some loosening of restrictions for the state’s restaurants this Friday. 

In Vermont, various efforts over the past year have aimed to help restaurants hold on. These include the ongoing Vermont Everyone Eats program that pays restaurants to prepare meals for the food insecure, grant programs and a free hospitality consulting service, called On the Fly, funded by the Vermont Agency of Commerce and Community Development and the federal Coronavirus Relief Fund through the end of 2020. Presentations by the group offered research and ideas to help businesses adapt to COVID-19 conditions and are still available to view online at www.ontheflyvermont.com. 

New help for restaurants comes in the form of the $1.9 trillion relief package just passed by the U.S. Senate and expected to reach President Joe Biden’s desk by the end of the week. The bill carves out a $28.6 billion Restaurant Revitalization Fund that will serve up grants to help cover pandemic-related losses experienced by restaurants, bars, caterers, tasting rooms and breweries, as well as restaurant groups with 20 or fewer locations. Twenty percent of program funds are reserved specifically to benefit small operators, those that grossed less than $500,000 in 2019, according to Nation’s Restaurant News. 

The fate of our restaurants has meaningful impact on the economy at large. The National Restaurant Association estimated that in 2018 there were 1,413 eating and drinking locations in Vermont and roughly 29,600 people employed in these and other foodservice businesses in 2019, representing about 9 percent of Vermont’s workforce. The organization estimates that the industry in the U.S. lost $240 billion in sales (off 27 percent) and 3.1 million jobs (down 20 percent) in 2020 versus expectations. 

Comment here