It has been a good year since the coronavirus pandemic decimated the catering industry. About 9,000 restaurants in Texas closed, says Emily Williams Knight, CEO of the Texas Restaurant Association. But the worst is behind us, right?
Depends on. Some restaurateurs who have suffered from the pandemic are only now realizing that their businesses cannot hold out.
“It just feels gruesome to these restaurant owners right now,” says Knight.
In one year, from March 2020 to March 2021, about 18% of restaurants in the Dallas area were down. Better times are likely ahead and new restaurant permit applications are increasing across the state, Knight says. But the closures continue to roll.
Restaurants are currently shouldering three problems, Knight explains:
First, restaurant labor costs have increased and restaurant owners are finding it difficult to fill vacancies. Second, the prices of some products have increased by 15 to 20% – items like chicken, beef, milk, and coffee. Restaurants are already operating at low margins, with “no more than 14 days of cash on hand,” says Knight – so they have no cushion to cover rising costs. And thirdly, restaurant operators who deferred their payments for rent or equipment during the pandemic now also have to pay.
“It’s a perfect storm for restaurants that have just weathered the crisis,” she says.
Some restaurant owners are responding to the challenges with price increases. But “for many it’s too late after just an incredible year,” says Knight.
Here are three restaurants in Dallas that didn’t survive.
Kozy Kitchen, an uptown brunch spot known for its gluten-free and healthy options, closed after the service on Mother’s Day 2021. It’s already been a roller coaster ride for Kozy, and not just because of the pandemic: it hopped in three restaurant locations in the past few years. Kozy started out on McKinney Avenue in Uptown, where it served breakfast and brunch for 16 years. Then, in 2019, it moved to Lakewood, where Chef Nick Pavageaux says Kozy never found a foothold in a new neighborhood. So he moved it back to Uptown during the pandemic in mid-2020, this time near Cole and Fitzhugh avenues. It took less than a year. Pavageaux says he needs a break from the restaurant owner and has accepted a job as head chef at the Trophy Club, a suburb of Dallas.
Haystack Burgers & Barley closed at Turtle Creek Village in Dallas on May 4, 2021. It was the second Haystack in D-FW after the original in Richardson. Co-owner Kevin Galvan says the Turtle Creek site has never been profitable. The same day his landlord posted a lockout sign on the door, Galvan said he had signed a lease for another restaurant in the Preston Hollow area. He and his wife Jenny Galvan run four haystacks – Richardson, Frisco, Lakewood Dallas, and Far North Dallas. Two more in Preston Hollow and Prosper are expected to open soon.
Public Taco’s entire existence was during the pandemic; It opened in May 2020 and recently closed on Preston Road on Royal Lane in Preston Hollow. According to CultureMap, the restaurant was owned by Joon and Michelle Choe, the founders of Freshfin Poke. A sign on the door says the closure is temporary, but calls to the landlord, landlord and founder went unanswered. Popular products were birria tacos and a Mexican-Korean fusion dish called takorea: a taco with rib eye, caramelized kimchi, and sriracha aioli.
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