Restaurants In Concord Are Facing Staffing, Supply Chain Issues

CONCORD, NH — The last 15 months have been a boomerang, of sorts, for restaurants in New Hampshire.

Midway through March 2020, as everything shut down, many restaurateurs and business owners thought they were going to lose everything. The industry requires customers to go out to eat and drink, spend their money, and be social — something that was restricted during the coronavirus pandemic. Eateries pivoted — offering outside dining and takeout options and strategizing to stay alive. Many survived until infections died down but some, however, did not.

As infections began to rise again last fall, it was another freakout moment for restaurants — the outdoor dining option was dampened due to chilly New Hampshire temperatures. Some experimented with delivery services and continued take-out while working with minimal staffing. As the holiday season subsided though, there was more worry — the sector was entering the first quarter, historically the worst time of the year for eateries. The New Hampshire Lodging & Restaurant Association launched a statewide effort to get the industry through and it appears to have worked.

But now coronavirus cases are on the decline. Fears have allayed a bit due to many people becoming vaccinated and the eventual onset of herd immunity — and many customers are excited to go back out again.

The red-hot economy is also giving low-skill and entry-level workers choices about where they want to work. And restaurants are bearing the brunt of that, too — at the same time customers are gaining trust to go back out to eat, many do not have the workers available to provide the service. Food supply issues, too, are a problem.

Concord restauranter interviews and recent outings confirmed the issue is bigger than everyone might think.

On May 15, the upstairs deck at The Draft, a popular and fun spot to eat and drink, while watching the traffic below, was closed to patrons due to lack of staffing, according to an employee.

The menu also shrunk to two pages compared to past outings. While potato skins were available as an appetizer, neither baked nor mashed potatoes were available as a side on entrees.

During a conversation with an employee, they said that chicken wings would probably be taken off the menu soon due to food supply issues and cost, as well as confirmation about labor issues with a lot of restaurants in the city, despite much higher wages than even just a few years ago.

Andy Sanborn, one of the co-owners of the sports bar, did not return an email or phone calls requesting comment about labor and food supply issues.

But Brian Shea, the owner of The Barley House, which has locations in Concord and North Hampton, confirmed both labor and supply chain issues — including the chicken wings issue.

Shea also said that during the past two years, business owners were being stymied by regulations on the state level despite a lot of loosening on the federal level. He said, it was like, "Who is asking for what now," constantly, and that was tapping his time, energy, and wearing his business and a lot of other businesses down.

"It is the untold story about what is going on right now," he said. "With restaurants, typically, everyone is a critic because we all relate to restaurants — we go to them. But when they go out and see a burger that is $18, they don't know the back story."

Restaurants, like any other business, have to make money or they will go out of business. The old model, not unlike many other businesses, does not work, Shea said. Threats on minimum wage increases to $15, health care, especially for tipped workers, and "other pressures" have "added burden onto the business," he said.

"Restaurant owners will say that they don't know any other business that is this tough to run," Shea said.

Shea said, at a factory that made widgets, the factory would make one or two kinds. At a restaurant, there are dozens of different kinds of widgets, at different stations of the business, with employees with different skill levels.

"It is very difficult to coordinate your labor," he said.

Historically, Shea said, workers, started with limited skills, at entry-level, and were taught the basics — show up on time, food safety, customer service, etc. Then, they progress up and make more money, maybe they take on more duties or responsibilities, too. Today, he said, the mentality is that all of those entry-level workers should start at the top of the wage chain.

"It's impossible to keep the good people there because they want more money," Shea said. At the same time, "I don't think I have paid less than $15 for a long time … the marketplace does take care of that."

Entry-level workers have to learn the business and work their way up, he said. Shea likened it to being forced to accept and pay top dollar for mediocrity versus allowing the employee's motivation and hard work to be rewarded with higher wages — like good service leading to higher tips.

When COVID-19 hit, Shea made a decision to pare everything back, manage with a smaller staff, to get through it, and then, later, the winter. Now, with the inflation rate, gas prices going up, supply chain issues, and everything else, it has gotten a lot worse when it was supposed to improve, he said.

Kirk McNeil has owned Area 23 for nearly six years and has also experienced food supply issues during the pandemic.

One of his most popular sandwiches, the crab Rangoon grilled cheese, has been off the menu for a year. While a tiny part of that has been not being able to get all of the ingredients, the bigger part was due to fears about the shelf life of the components of the sandwich. The crab meat needs to be very fresh; so, do the scallions and cream cheese. It only has a certain shelf life and might not last as long as possible, especially with diminished customers. And, in order to make money on the sandwich, a lot of crab meat needs to be ordered. Freezing the crabmeat, too, does not work because it changes the texture of the meat, he said.

Thankfully, he noted, Area 23 has maintained his customer base, and now, he can bring it back, soon.

"I want it back, too," McNeil laughingly said.

A lot of Area 23's business model is event-driven — open mic, drumming, trivia nights, and bands, too. He can tell from the bands coming in and the crowd what kinds of foods he will need on hand. That was nearly impossible to sustain during the pandemic. But musicians and their fans hung out outside, ordered to-go, and performed, too, in all kinds of outdoor conditions.

McNeil said one of the first things he did when the lockdown occurred was to divvy up his leftover food for employees so the food would be eaten by someone and not just go bad. After that, he sat down with employees to find out how they could all make it through together. That loyalty — standing with employees during the tough times and then, helping them through and bringing them back, has led to retention, too. He had 12 employees before the shutdown in March 2020 and now has 10 — almost full employment.

"We keep it small," he said. "But we're trying to make sure everybody has availability (and) hire exactly what we need. They tell me when they want to work and when they can work and we schedule from there. Our callout rate is nearly nothing."

McNeil food chain supply issues had been a problem — especially when trying to reach a minimum standard. It was true, he said, not just with wings but a lot of things. But, with that, comes ingenuity — instead of ordering the wings, he ordered shredded chicken thigh meat and was planning on buffalo chicken sandwiches with homemade sauces. He also ordered corned beef brisket to make "kick-ass Ruebens." Food also is not always the same thing, McNeil said.

"And one of the things we've just told everybody is, you're going to need to be flexible with us on this," he said. "We're going to have good food; high-quality food. And, perhaps, an advantage, it won't always be the same. We promise you there will be something you can eat here."

Mike Somers, the president and CEO of the New Hampshire Lodging & Restaurant Association, said there were "a lot of things in play" with the workforce issue.

One is that labor is "rather expensive" and currently, restaurateurs cannot find help. In fact, Somers said, changes to unemployment and employment problems, in general, are causing problems "across all industries, across the nation."

Another is that there are fewer young people working. Many of them who are college-bound have "a whole list of extracurriculars" they need to take to get into school.

Somers said those workers, who historically work in restaurants and entry-level, are a large percentage of that workforce.

"It's a real challenge," he said. "We don't have enough workers to fill positions and we have an economy that is basically on fire."

The restaurant workforce issue is nothing new though and not just about coronavirus — members have been talking about it since 2015 or 2016, when they could not fill positions then, he said. Now that things are humming again, it is even worse than before.

Somers said more foreign workers should be allowed into the state and also, a "returning worker exemption," was needed. This is where workers who come to New Hampshire and leave, like they are supposed to, are allowed back in more easily the next season. The North Country and Lakes Region "need them desperately during the summer season," he said.

"COVID really showed us the weakness in our economy," Somers said. "Some folks are collecting unemployment; others have child care issues; we're not going to get everybody back to work tomorrow. And even if we did, we would still be thousands of people short."

Then, there are supply chain issues, too.

And for items like chicken wings, a restaurant staple, as well as other things. Chicken wings, according to some restaurant workers, are being taken off the menu because they are too expensive and the quality has been low in recent months. There are not workers employed in processing mills or even truckers to move the wings and other items around the nation.

Restaurants are having to pivot, too, in reducing other menu items at a time when customers are ready to spend money and want more options.

"When COVID hit, restaurants pared-back and went to basics," Somers said. "They looked a kitchen labor … something that takes two hours for a cook to make might not be the best thing to serve."

Somers said restaurants focused on menu changes to make it more manageable with a smaller staff to get through the pandemic and later, the winter. Now, it is spring though, he said, and the weather is changing. Some eateries are adding more things but are now facing supply chain problems.

But during the past few weeks, just before the announcement that nationally, inflation had risen by 4.2 percent, the highest level since the dot-con, tech bubble burst, as well as the hacking attack of the gas pipeline, the supply chains got nailed. Somers said economic factors outside of New Hampshire "puts pressure" on everything — prices and costs, supplies, making everything a lot more difficult to manage.

"Gas prices are going up," he said. "Shipping is going up … it's a little scary (and) it's becoming really difficult to manage."

Somers added that all the restaurants are in the same boat. But the questions remain: "How much can you raise your prices and how much will the public allow you to raise your prices?"

There are positives, though, too, including the pent-up demand with customers.

The economy is also red hot in New Hampshire — unemployment, according to the latest figures released for April, shows the state at 2.6 percent, the lowest in the nation, tied with Nebraska, South Dakota, and Utah. That is down from 16 percent in April 2020. Wages have also been naturally rising for a number of years, both statewide and nationally.

Gov. Chris Sununu said the state's balance of public safety while keeping the economy open and providing relief to businesses that closed or individuals who lost everything were the big reasons why things were turning around in the wake of the pandemic subsiding a bit.

"Thanks to our smart investments and public health decisions made based on the data, we kept New Hampshire families safe without sacrificing the health of our economy, and (the) jobs report show that we’ve done it better than anyone," he said. "It's going to be a booming summer in New Hampshire that only further builds upon our economic success. New Hampshire is open for business."

New Hampshire is also considered one of the safest states during COVID-19, according to a number of studies performed by WalletHub.com, the credit report and financial website. Last week, the company said the state was 5th — up from 10th in late April.

Somers agreed with Sununu and others that it was going to be a great summer tourism season in New Hampshire.

Higher wages are also good for workers in the economy — whether out of work or currently working. In the past, restaurant wages were lower than they are now, and not that long ago either. Today, entry-level positions are $14 to $15 an hour. Line cooks are making $18 to $20. Some waitrons are making $30 an hour.

"Wages have never been higher," Somers said, "and that's a benefit for workers."

There are also other problems on the horizon, too, for New Hampshire workers.

Many cannot find accessible or affordable housing even as wages are climbing in the sector and businesses. Like others, Somers said the housing situation had been with the state for at least two decades and was a broader issue.

A lot of out-of-staters, too, with second homes, have made those homes their first home now, Somers said.

And the pandemic "compounded all of this," he said.

Somers expected the situation to be what it is now, with limited choices for customers but higher wages for workers, through the summer. If the economy cools nationally and the dust settles, that may change in the future.

"At this time, we just don't know," he said.

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