What’s The Outlook for Pittsburgh Restaurants in 2022?
The short answer is nobody knows as the coronavirus surges again and the cost of doing business remains high. But a couple of forthcoming openings and the return of some old favorites are bright spots on the horizon.
In January 2021, there was an overall sense of optimism about the year ahead for Pittsburgh restaurants.
Federal funding via the Paycheck Protection Program, expanded unemployment benefits and the Restaurant Revitalization Fund helped keep many struggling restaurants afloat and restaurant workers either employed or out of financial hardship. We had a generally shared understanding of the rules of dining out. Heated outdoor spaces popped up in neighborhoods throughout the city, and people who preferred to stay at home were eager to get takeout from their favorite restaurants. Finally, as COVID-19 vaccinations were beginning to be administered en masse, hope was on the horizon.
If you’d asked most people a year ago what January 2022 would look like, some version of “probably back to normal” would have been the answer.
The outlook for Pittsburgh restaurants in 2022 is not close to normal.
A seemingly endless pandemic, shifting economics and empowerment of labor, lingering supply chain delays and possibly permanent pricing increases are making it a highly uncertain time for Pittsburgh restaurants and the people who work in them.
“When you face one thing, it’s OK. But when you face all of these things at the same time, it’s extraordinarily tough,” says Mike Chen, co-owner of Everyday Noodles in Squirrel Hill.
What’s certain is that the next few months will require some degree of limberness.
“One of the things we had to learn to do is change the way we think about operating. We always had a mentality we’re going to be open these days no matter what, we’re going to have the whole menu no matter what. And now some days we might have to be closed for lunch or not have the whole menu we want. It’s about learning to adapt and doing it,” says Bill Fuller, president and corporate chef of big Burrito Restaurant Group.
Despite all of this, there is some hope on the horizon. A couple of exciting new openings are slated for this winter, both of them in the fast-casual sphere — big Burrito’s Alta Via Pizzeria in Bakery Square and Give & Go Market + Sandwiches, a Bloomfield sandwich shop from the owners of Baby Loves Tacos. Some longtime favorites are ramping up, too — DiAnioa’s Eatery brings back breakfast and lunch service to The Strip this week and Meat & Potatoes, the popular Downtown spot from the Richard DeShantz Restaurant Group, is reopening in February to coincide with the run of the touring production of “Hamilton.”
Just about every day for the past month, restaurants in Pittsburgh have announced temporary closures on social media as the omicron variant surges through the region. The loss of revenue surrounding the end of the holiday season and the beginning of the new year left Pittsburgh’s hospitality industry starting on shaky footing in 2022.
“December in general is a really big financial time for workers and for owners. It helps everyone get through January, February and March, which, historically, are already slow financial periods for restaurants,” says Kacy McGill, co-director and co-founder of Pittsburgh Restaurant Workers Aid.
Omar Abuhejleh, chef and owner of B52 in Lawrenceville and Allegro Hearth Bakery in Squirrel Hill, says that riding the various waves of the pandemic this year, particularly at B52, has taken its toll on morale and his bottom line. The vegan restaurant and daytime cafe has been open for in-person dining in fits and starts throughout the past 20 months. It most recently welcomed guests again on Dec. 21 following months of carryout only, to halt (along with Allegro Hearth) operations entirely again on Jan. 2 due to several staff members’ potential exposure to coronavirus.
“It’s not sustainable as a business to close repeatedly like that. It’s a huge strain on us financially, but also mentally. We make everything from scratch so we have to start everything over again every time it happens. It’s a huge undertaking to go through that process,” he says.
Both businesses reopened earlier this week, but B52 will remain closed for in-person dining until the end of the month. Abuhejleh reports that while takeout business remains brisk, he’s lost about 40% of the revenue he’d make if indoor dining were consistent at his daytime establishment. “For restaurants that are open for dinner and with bar service, I’m sure it’s even bigger than that,” he says.
Assuming data from places such as South Africa and London indicate what’s to come, omicron likely will hit a peak and then subside in the next few weeks in Pittsburgh. But even if numbers of positive coronavirus cases dip significantly and remain low, restaurants here still face significant challenges in the year ahead.
Restaurants are a low-margin business, and the rising costs of goods combined with the loss of potential revenue due to augmented service is forcing restaurants to the breaking point. Across the board, the price of menu items is rising, and those higher costs affect how people decide where and how often to eat.
“As food and labor increase, it’s harder and harder to balance it all out. I can raise my prices by maybe another couple of dollars, but when someone goes to my restaurant and you tell them they have to pay $20 for a bowl of noodles, that’s very hard,” Chen says.
Chen says his business is about 80% to 85% of what it was prior to the pandemic, but his profits are lower than that because the cost of ingredients and other services have risen so dramatically. For example, beef shanks and tendons, both critical components in several dishes at Everyday Noodles, are double the price of what they used to be.
Abuhejleh says that it’s not only prices on ingredients that are rising, it’s also that some wholesalers are dealing with uncertain supply and demand by raising their minimum orders for delivery (one bakery supply company now requires a $700 minimum order, up from $400) but often the quality of what’s delivered is diminished. On top of that, parts take a significant amount of time to arrive, delaying needed repairs or upgrades; Abuhejleh recently was quoted a five-month wait time to replace a broken air conditioner unit.
Although overall supply chain issues are slowly starting to subside, the upsurge in cost of everything from crab meat — which Fuller says, got “absurdly expensive” and remains more than double what it used to cost — to foam insulation in a new produce refrigerator likely will remain, at least to some degree. And that’s going to shift the dynamic of where and how often people dine out.
“As things become more expensive, what people can afford is going to move to a more casual segment on a regular basis. Every seat at Eleven (big Burrito’s high-end restaurant in the Strip District) that we can fill, we are able to fill. But restaurants like that will move to more of a special occasion decision and ‘let’s go get dinner’ on a Tuesday night will move to a more casual destination,” Fuller says.
Staffing shortages at restaurants are likely to continue for some time, too. Chen, a founder and four-time president of the Pittsburgh Chinese Restaurant Association, says that many of Pittsburgh’s Chinese restaurants are choosing to close several days a week because they don’t have enough employees to stay open. He says he’s had to cut back on menu items at Everyday Noodles, too, because he doesn’t have enough skilled labor in his kitchen.
McGill says that while the staffing crisis is hard for everybody, it also presents an opportunity to improve working conditions overall in the hospitality industry. Owners can be proactive in making changes to rebuild and retain staffing moving forward. “Each restaurant is very different. What’s really important is to talk to your workers and recognize that this is a very difficult time. Have a discussion about what COVID-19 safety measures you can take, but don’t make it a top-down approach. That’s going to be important, especially for retaining employees,” they say.
Otherwise, McGill reports that hospitality industry workers who have stuck it out until now might see their last threads of connection to the establishments they work for fray. And those who are new to the field — a growing number according to multiple restaurant owners, who say they were starting to see a lot of applications for positions pre-omicron — aren’t going to stick around long.
Just about everyone who works in hospitality agrees that another round of federal funding for operators and workers who have lost wages due to restaurants temporarily closing or severely limiting hours is essential. But it doesn’t seem like there is any will in Washington, D.C. to push that forward quick enough to get them through this surge and the lean winter months.
“I don’t know who is going to stick with it and who is going to walk away from it. But I imagine we’re going to see some shrinking in the restaurant industry. Some people are going to say they’ve had enough,” says Abuhejleh.
But restaurant operators, despite the toll the past year has taken on them, seem, at least for now, to hold on to the notion that a brighter future is ahead later this year. That future, however, will certainly include changing the way the industry operates prior to the pandemic.
“Sometimes in the last few months I’ve felt like I’ve wanted to retire,” says Chen. “What keeps me going is that I have loyalty. Even when we’ve had to shut down the dining room, I had staff stick with me. I had customers stick with me. I can’t just shut it all down. I just try to break even and hope there is going to be some change in the future.”