DENVER — Fears of a possible recession reverberate throughout Colorado's restaurant industry, which is still working to rebound from the COVID-19 pandemic.
According to data released last month by the National Restaurant Association, 43% of restaurant operators believe economic conditions will get worse over the next six months, while only 18% believe conditions will improve. Additionally, a Goldman Sachs survey reveals 80% of small business owners feel the economy has worsened in the past three months.
This myriad of sentiments is on full display in Colorado's restaurant industry.
This week, Hapa, a Japanese restaurant with four locations across the state, announced a "Hapa Inflation Relief" promotion for customers.
"We're offering $15 off," said Ben Katz, district manager for Hapa. "We want to give you a little incentive to come on by."
Hapa's efforts come as the restaurant industry tackles new challenges — persistent supply chain issues and inflation.
"There's been a lot of a lot of difficulties with COVID and closing in-house dining and [then] reopening and all the different changes that have come," Katz said. "Now, we've had to raise our costs to hit our margins."
Meanwhile, some Denver businesses are buckling under the economic pressures. On Monday, Ryan Cobbins had to temporarily close his business, Coffee at The Point, and lay off his entire staff.
"Rising costs in inflation," he said. "I mean, I just received a letter from one of our vendors that their prices are going to increase on us by 15%, six months after prices already increased from that same vendor."
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Cobbins hopes to reopen by Sept. 13 with a shop makeover and "culture change." He's also hoping to address staffing difficulties and settle a lawsuit filed by a partner who signed on in 2020.
"We're without revenue this week, and the revenue that we were going to make this week was going toward payroll," Cobbins said.
Whether it be a closure or a coupon, the respective situations at Coffee at The Point and Hapa are bound to become more common, according to University of Denver economics professor, Mac Clouse.
"Businesses are going to try to do something because we're starting to see the slowdown in consumer spending," Clouse said.
The professor said while debate continues on whether the country is in a recession, according to traditional economic parameters, a recession has indeed begun.
"A recession is when there's two consecutive quarters of negative growth in the GDP, and we've had that." he said.
The ongoing lawsuit between Cobbins and the business partner has been covered extensively by Tiney Ricciardi and our partners at The Denver Post.
