Despite improving sales so far in 2022, rising expenses and staffing shortages are still issues for Rio Rancho restaurants.
“The cost of doing everything is just going up and up and up, way faster than we can actually compensate for in price increases. Even though sales are strong and cash flow is good, the outflows are increasing at a dramatic rate. In the long term, if they keep doing this, it’s not going to be tenable,” said Turtle Mountain Brewing Company owner Nico Ortiz.
Carol Wight, CEO of the New Mexico Restaurant Association, is concerned about the number of restaurants struggling to bring in employees ahead of the summer months. She said the shortages are to a point where restaurants may have close or work reduced operating hours certain days of the week to give employees a break. That could lead to restaurants struggling to pay their bills and fixed costs, which would create a financial burden down the road.
“Ultimately, I don’t think it’s good for the economy when people are having to make the choice to close rather than be open,” Wight said.
Corrales Bistro is a prime example. The popular restaurant announced on its Facebook page that it’s temporarily closed due to staffing issues.
According to data from the New Mexico Department of Workforce Solutions, the leisure and hospitality sector saw a 16.6-percent decrease in job growth between January and April. Between January 2022 and April 2022, consumer prices on food and beverages in the western United States rose about 2.8 percent, according to the U.S. Bureau of Labor Statistics.
Sales show promise, for now
Turtle Mountain’s sales for its Southern Boulevard location so far in 2022 are up 4.65 percent, while sales for Dairy Queen’s Rio Rancho over the same time period are even with 2021, but inching closer to 2019 sales numbers.
Megan Garrigan, co-owner of Lily and Liam Bistro and Upscale Burgers, expects sales for both of her restaurants to keep growing entering the summer. Sales for Upscale Burgers, in Cottonwood Mall, rose 70 percent since May 2021. Sales numbers in 2022 for Lily and Liam Bistro, located in Rio Rancho, aren’t available because of recent changes that were made to its point-of-sale system.
Wholesale food prices are up close to 16 percent, Wight said, adding that she’s having to tell people to increase their sale prices to make up for it and remain profitable. Paired with workforce shortages, the issue of payroll and food costs only add onto that inflation-related pressure.
“There’s just a lot of pressure,” Wight said.
Turtle Mountain’s restaurant operation expenses rose about 24.17 percent compared to 2021, and its labor costs are up 24.72 percent compared to 2021.
“It’s definitely headed in the wrong direction, but there’s nothing I can do about it. We have to pay people what the market demands in order to get them to work,” Ortiz said.
Tony Otero, owner of Dairy Queen in Rio Rancho, said he’s dealing with with a 35-percent increase in product costs compared to 2019.
Another difficulty owners face is the cost of good constantly fluctuating, said Garrigan. That includes items like plastic spoons, to-go boxes, meats and vegetables.
“Availability can sometimes change. That’s certainly something,” she said.
Staffing remains a challenge
Between the Enchanted Hills and Southern Boulevard brewpubs, Turtle Mountain needs to fill about 10 combined kitchen staff vacancies to restore full operating hours and operate normally.
Staffing issues reached a point in May where the brewpub on Southern Boulevard is only open six days a week, and it must curtail hours because of that. Despite hopes to open the one in Enchanted Hills seven days a week, it’s still only open five days.
Ortiz said that because kitchen staff shortages may lead to increased wages for other employees, labor costs could increase across the board.
“We’re only bringing in the same amount of money for pizza, but now we’re having to pay a ton more money for the people who are actually making the pizzas,” Ortiz said. “The story with us is not any different than any other restaurant in the metro… Kitchen people left the industry and never came back during COVID. I don’t blame them, for reasons of wages, treatment, COVID and everything else.”
The Rio Rancho Dairy Queen still needs to fill between six and 10 vacancies.
“I could use all positions. I’m still shorthanded,” Otero said. “If I had a few extra people, it wouldn’t be as hard a deal.”
Dairy Queen’s staff shortage is to a point where employees had to work multiple roles, Otero said. For example, someone working the counter may also have to help make food.
Garrigan said Upscale Burgers still needs to fill vacancies including two servers and two dish-wash prep roles, as well as full-time and part-time baker positions at Lily and Liam Bistro.
Hope on the way?
To help address restaurant staffing woes, Wight said the NMRA recently collaborated with the state Department of Workforce Solutions on a pilot project in Carlsbad to help the city’s hotels and restaurants. She said the project entailed training high school students there, leading to 50-100 job applications.
The NMRA’s goal is to replicate that project in other parts of the state.
Aside from filling summer vacancies, Wight said high school kids can learn soft skills like communication and teamwork through working at a restaurant.