For more than five years, I’ve spotlighted several south suburban small-business owners in this column. With repercussions of the COVID-19 pandemic still reverberating along with the spike in inflation, here is a look at how one of those businesses is faring in this intermittent column series.
Glynis Harvey feels like she has been hit with a double whammy. She and her husband, Mark Cagley, have worked diligently and successfully to keep their Matteson-based restaurant, Hidden Manna Cafe, going amid the COVID-19 pandemic, which pummeled industry sales.
They were hoping for better times this year. Now they’re dealing with the uncertainty of how inflation and threats of a recession will affect their bottom line and the industry’s recovery.
Last year, the 8-year-old restaurant’s sales were the lowest since the second year it opened, said Harvey.
Nationally, restaurant sales in 2021 were $799 billion, down $65 billion from pre-pandemic levels, according to the National Restaurant Association. Some 90,000 restaurants have temporarily or permanently closed since the pandemic began, according to the association.
This year, customer volume at Hidden Manna Cafe, which serves Creole and Cajun cuisine and seats 126 people, has risen. But sales still are not at pre-pandemic levels, Harvey said. And now, “our cost of goods has gone up,” said Harvey, who noted the cost of crawfish has jumped from about $7 a pound before the pandemic to $12.50 today, and regular crab legs are more than $20 a pound.
“When we purchase our food, we use food purveyors and they have a fuel surcharge,” she said.
As an independent restaurant, the business doesn’t get the sales volume discounts or purchasing discounts that large chain restaurants get, so inflation is making its profit margins even tighter, Harvey stressed.
The couple is weighing increasing prices in response to the higher costs, “but we’re not going to go crazy with price increases,” Harvey said.
Indeed, potential restaurant patrons already are faced with higher costs across the board. The Consumer Price Index in the Chicago metropolitan area rose 8% in May from a year earlier, according to the U.S. Labor Department. Gas prices shot up more than 50%, and grocery prices rose nearly 11%, which will cause many consumers to keep a tighter rein on discretionary spending.
Hidden Manna Cafe already has seen a 10% to 15% decline in sales in recent weeks, Harvey estimated.
With beef, pork and poultry prices all up double digits, restaurant owners and operators can’t increase prices as fast as product costs are increasing, said Sam Toia, president and CEO of the Illinois Restaurant Association.
But restaurants are increasing prices. Prices for food away from home rose nearly 9% in May from a year earlier.
Restaurants are being cautious on how much they’re raising prices, Toia said.
“What some are doing to combat inflation is they are adding extra fees to meals,” Toia said. “They are calling it a surcharge. Some are calling it a COVID charge.”
They’re also shrinking their menus to take off higher cost items, he said.
Some restaurants are also reducing portion sizes and reducing their hours to cut costs.
Portion sizes at Hidden Manna Cafe have not been reduced, said Harvey. But supply chain issues caused by the pandemic have caused the couple to temporarily take some items off the menu, she said.
“We mark it out of stock until we can get it,” she said.
Among items the restaurant has had difficulty getting delivered from its food and restaurant purveyor vendors in recent weeks are collard greens, American cheese and the paper it uses to cover its cloth tablecloths, she said. They’ve had to resort to shopping at a restaurant depot and grocery stores for some items.
Due to the pandemic, the restaurant changed its hours. It now operates from 11 a.m. to 5 p.m. Monday through Friday, except for Wednesday, when it is closed; from 11 a.m. to 7 p.m. Saturday; and from 10 a.m. to 3 p.m. Sunday.
“Pre-pandemic, we had totally different hours,” said Harvey. “We had longer hours on Fridays and Saturdays because we had music in the evening on Fridays and Saturdays.”
They temporarily tried bringing back weekend music entertainment in December but didn’t get the turnout.
“I think people are still hesitant about coming out,” she said.
The business has persevered during the pandemic thanks in part to two state COVID-19 relief related grants it received totaling $105,000.
The grants “allowed us to stay open and to pay our staff a little bit more,” she said.
Like many in the restaurant industry, the couple has had difficulty filling staff positions since the pandemic began. The restaurant, which employed 25 people before the pandemic, employs 14 today. It has several openings including for a line cook, barista/bartender and dishwasher. But Harvey said they are in a better position today on the staffing front than they were last year.
“Last August, we had to be closed for certain days because our staff was worn out,” she said. “Some of them were doing overtime every week, and that was with modified hours. At one point, we only had six people working.”
Harvey and Cagley initially had no plans to open a full-service restaurant. The two, who previously worked for the CTA, she as an electrical engineer and he as a mechanic, had planned to instead open a coffee shop after they fell in love with the property. But they were encouraged to open the restaurant instead.
Besides the restaurant, the couple run a property management company, which has helped see them through the lean times the restaurant has endured during the pandemic, she said.
Harvey is not sure what to expect for sales at Hidden Manna Cafe in full-year 2023.
“It’s hard to say,” she said. “I’m reading all these reports saying we need to brace ourselves for a recession, which definitely would impact the restaurant industry as a whole not just Hidden Manna Cafe,” she said.
Among the lessons she has learned amid the challenges the past couple of years are, “You have to be able to think on your toes, make decisions and hope they make for the best outcome,” she said.
What has kept her going?
“Our staff and their willingness to want to work and see the business succeed,” she said. “But it’s definite stressful. We have to take it day by day. That’s the only thing I can do at this juncture. I have to look at today and tomorrow. That’s as far as I can actually look.”
Francine Knowles is a freelance columnist for the Daily Southtown
