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Wisconsin bars, restaurants continue post-pandemic recovery. But impacts linger, report says

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May 30, 2024
Milwaukee's Harbor House restaurant (left) is among the city's most prominent eateries. A new report says Wisconsin's restaurants and taverns continue their post-pandemic recovery.

Milwaukee’s Harbor House restaurant (left) is among the city’s most prominent eateries. A new report says Wisconsin’s restaurants and taverns continue their post-pandemic recovery.

Wisconsin’s bars and restaurants continue to recover from the COVID-19 pandemic’s devastating economic effects, but some of the impacts still linger.

That’s according to a new report from the Wisconsin Policy Forum, a nonpartisan, nonprofit public policy research group based in Madison.

Here’s what to know.

Jobs return − especially during summer

“After a long and slow recovery, employment in Wisconsin’s restaurants and bars has finally returned topre-pandemic levels,” the report said.

The most recent federal estimates show 203,700 workers employed in those businesses in February. That compares to 202,800 in February 2020.

The report notes restaurant and bar employment peaks in the summer. Employment last peaked at 218,100 in August 2023, which was still short of the pre-pandemic high of 219,200 in August 2019.

Report used state, federal and industry data

The forum last assessed the industry’s state of recovery in September 2021. It found an overall rebound at that time, but the number of people Wisconsin restaurants and taverns employed remained down by roughly 9% compared to the period before the pandemic struck in March 2020.

The latest report’s primary data sources are the U.S. Bureau of Labor Statistics, the Wisconsin Department of Revenue and the National Restaurant Association.

“Interviews with leaders of Wisconsin’s restaurant and bar industry also provided critical context,” the new report said.

Revenues rebound, but lag inflation

Wisconsin sales tax collections show revenue generated by restaurants and bars statewide totaled more than $578 million in 2023 − 17.3% higher than in 2019.

However, that lagged the pace of inflation (19.2% for that period).

“Given inflation and higher food and by extension menu prices,” the report said, “this suggests that restaurants are earning a similar amount of revenue as before the pandemic on what is likely to be a lower number of transactions or smaller orders.

“Many restaurants also continue to operate on fewer days or for shorter hours than before the pandemic, so they are likely generating more revenue for each hour of operation,” it said.

Bars hit harder than restaurants

The pandemic forced some Wisconsin restaurants and bars to close. But most survived, in part by using federal pandemic relief aid.

“Bars were lost at a faster rate than restaurants during the pandemic, however, and it is possible that their numbers remain down,” the report said. A lag in data on taverns prevents a more definitive conclusion.

A longer-term decline in the number of Wisconsin bars, dating back 20 years, “has been driven by a loss of small, family-owned businesses,” it said.

Also, “mid-priced sit-down restaurants, whose customers are more sensitive to price increases than those of fine dining establishments, and restaurants serving lunch in downtown areas, where fewer people are working andgoing out for lunch due to remote and hybrid work arrangements,” have been more affected than other eateries.

Wage, menu price increases have slowed

Median annual wages for employees in food preparation and serving occupations increased 4.2% in 2023, whichmatched the pace of growth for all occupations. That compares to 29.8% growth between 2019 and 2022.

“One key factor slowing wage growth is that the previously intense demand for restaurant workers has cooled somewhat,” the report said.

Meanwhile, menu price increases have slowed in the last year.

“According to analysis from the National Restaurant Association, year-over-year menu price increases for full-servicerestaurants were as high as 9.0% for several months in 2022 but had fallen to 3.2% as of March 2024,” the report said.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on InstagramX and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Wisconsin bars, restaurants continue post-COVID recovery, study says

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