DES MOINES — Many Iowa restaurants are wondering how they’ll be able to start paying off federal loans that were made available at the start of the pandemic. Payments on Economic Injury Disaster Loans were deferred for more than two years.
Iowa Restaurant Association CEO Jessica Dunker says spending patterns have changed and it’s a struggle for some restaurants to start making those monthly payments. “People are again back to drinking only water, sharing an entre, not ordering appetizers, looking for discounted meals,” Dunker says. “They’ll come out, but they’re changing their purchase behavior and when you’re in an industry on the restaurant side that has a 5% net profit, that makes it pretty difficult to make money.”
Dunker says for most restaurants, profits are razor thin. “Very few people are back to the profitability levels that they had in 2019,” she says.
She says that means closures. “It’s worrisome. I’ve been watching it really closely,” Dunker says. “We’re still facing those huge increases in percentage of cost of good and cost of labor, so hospitality is still a struggle to make a profitable business out of.”
By the end of LAST year, about 800 restaurants that were open at the beginning of the pandemic had closed, and Dunker warns there will be more to add to that list when the tally is done for 2023.