River North restaurants reduce hours of operation more than any region in the US during COVID, analysis finds – NBC Chicago

Restaurants in Chicago’s River North neighborhood have reduced their hours more during the COVID-19 pandemic than restaurants in any other part of the country, according to a new survey.

Some restaurants have stopped serving lunch altogether. Some restaurants are now closed several days a week to remain profitable.

On average, restaurants in River North in the 60654 ZIP code reduced 20.2 hours per week between October 2019 and October 2022, according to analysis by Datassential, a Chicago-based firm.

This figure massively exceeds the national average drop of 6.4 hours per week over the same period, according to the analysis.

In terms of reduced operating hours, New York City has 12 of the top 15 ZIP Codes – but the North River was higher than any of them, taking the top spot.

But why were the restaurants in River North the most vulnerable?

Restaurant owners point to a few factors: inflation, a persistent lack of manpower, changing consumer habits. But the biggest problem could be the slow return of workers to the city center.

“River North was hit the hardest because it was so close to the financial district – but it never really got people back to work,” said Sam Sanchez, CEO of Third Coast Hospitality.

Sanchez has not hosted lunch service at his two River North restaurants, Tree House Chicago and Moe’s Cantina, since COVID hit.

Sanchez said he would go out of business if he didn’t cut those lunch hours because labor is a big part of his operating costs. And he didn’t see the crowds returning for happy hour either.

“I’m not going to open for lunch if I only have 10, 20, 30 tables throughout the lunch period,” he said. “And people don’t go out late at night on Monday, Tuesday, Wednesday. So you don’t open” then.

Restaurants are also closing earlier nationwide. On a typical Wednesday evening, about 41% of restaurants are open at 9:45 p.m., up from 56% in 2019, according to the survey.

Sanchez hopes more people will return to work in the spring.

“We need a density of people. We need traffic. We need new ideas. We need to attract people to River North,” he said.

Workers have remained stubbornly absent from the central business district since COVID hit nearly three years ago.

Office occupancy is still half what it was in 2019, and foot traffic is two-thirds what it was then, according to analysis by the Chicago Loop Alliance. Developers seeking to adapt to the new normal have proposed turning empty office space into apartments to revive the once bustling Rue La Salle corridor.

A positive sign: Business events and conventions have started to return to Chicago, Sanchez said.

But he is preparing for a harsh winter. In January and February, he will likely keep his River North restaurants open only three days a week.

In addition to the lack of customers, the restaurants are suffering from a labor shortage.

“A lot of owner/operators tell me, ‘We really need more team members,'” said Sam Toia, president of the Illinois Restaurant Association. “When you’re short on team members, you have to cut your hours.”

Nationwide, two out of three restaurants were understaffed in August, according to the National Restaurant Association.

Kevin Vaughan owns the Emerald Loop, 216 N. Wabash Ave., and the Chicago Brewhouse on the Riverwalk. He, like others, struggled to attract workers.

“It’s a tough business to run right now. We work nights and weekends. It’s tough, customer-facing work,” he said.

Many of these potential workers choose to work in the gig economy, he said.

“We offer a lot of flexibility, but the gig economy offers even more flexibility,” Vaughan said.

He reached out to community colleges to attract workers so he wouldn’t have to cut his hours. “About 50% respond to interview requests. And when we schedule interviews, we beat about 50% after that,” Vaughan said.

The Illinois Restaurant Association attempted to address the labor shortage by advocating for immigration reform. Declining immigration under the last two presidential administrations could be to blame for the lack of available workers, Toia said.

He wants work visas for hospitality workers, just like the United States does for agricultural workers. That idea could have bipartisan support because this staffing issue affects both red and blue states alike, he said.

Restaurants have also reduced their hours to adapt to changing consumer habits. Customers are ordering more takeout and prefer to eat at home, either to save money or to stay safe from COVID.

Take-out and delivery rates have nearly doubled since before the pandemic, which has reduced restaurant revenue, Toia said.

Ordering take-out and delivery “was starting to get trendy before the pandemic, but it really picked up steam during the pandemic. A lot of people didn’t back down on that,” Toia said.

Even though some people are ordering delivery from these restaurants — through DoorDash, Uber Eats, and Grubhub — the restaurants are seeing less revenue due to app fees and lost drink sales.

“It’s also cheaper because you could have a bottle at home. If you go to a restaurant, you buy that bottle of wine,” Toia said.

Vaughan has avoided cutting hours at those two restaurants because he still sees traffic from nearby hotels and Riverwalk tourism.

Restaurants are struggling more in areas that rely on downtown workers who haven’t returned in person, both in River North and the Loop, he said.

“Emerald Loop is in a great spot there,” Vaughan said. “If I was more focused on the Loop, I would be in big trouble. If I was in the middle, even a block further south, I’d have a big disaster on my hands. I’m lucky to have a lot of hotels around me,” he said.

“Some of my peers who operate more in the loop and have more business [that’s] customer-oriented, are still suffering a lot,” he said.

NBC Chicago

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