PORTLAND, Ore. (KOIN) — Limited capacity and masking requirements are no longer impacting Oregon restaurants, but new challenges — like rising wages, inflation and debt incurred during the pandemic — are still causing many to fight an uphill battle to stay open.
So far in 2023, 199 Oregon restaurants have closed permanently. Of those, 72 have been in Portland.
One of the latest Portland restaurants to announce its closure is Zell’s Cafe at Southeast Morrison Street and 13th Avenue. The business said it will close permanently on May 2 and that labor and food costs have forced it to reimagine the way it operates.
“Most restaurants are on a razor-thin profit margin as it is, where you have to raise your prices. Unfortunately, we’re getting to the point where we just don’t know how much more restaurants can raise the prices and still have customers come in,” said Greg Astley, director of government affairs for the Oregon Restaurant and Lodging Association.
If customers have noticed rising prices on the menu, Astley said that’s likely a direct result of what restaurants have been paying in wages, for supplies and for transporting goods.
Things have become more expensive. From March 2022 to March 2023, the Bureau of Labor and Statistics reports that food prices have increased by 8.5%. Couple that with Oregon’s increasing minimum wage, which will rise again in July, and Astley said restaurants are struggling to keep up.
Not to mention several of them went into debt to keep their doors open during the pandemic, Astley said, and now they’re digging themselves out of that debt.
For about two years, they had to pay their employees, pay their lease and pay their vendors all while trying to turn a profit with limited seating, limited hours and limited supplies.
Another lingering pandemic-related challenge restaurants are facing is hiring staff. When cafés, bars, food halls and breweries all closed during the pandemic, many of their service-industry employees were forced to find jobs elsewhere.
Now, it’s been difficult to get them back.
“What that has caused restaurants to do is have to trim their hours, which means they don’t have as many seats, which means it is more difficult for them to make up the money that they still owe, that they incurred during the pandemic,” Astley explained.
Restaurants have also had to adjust to more people working from home and fewer employees in downtown core areas.
Popular Portland restaurants like Canard and Top Burmese have expanded to Portland-area suburbs. Astley said this could be one way they’re trying to reach more customers who are working from home and no longer driving into the city.
Restaurants have also embraced the outdoor seating options that municipalities granted them during the pandemic. These patio and parklet areas have allowed restaurants to seat more people and Astley thinks restaurants will push to keep these spaces open.
While Portland’s restaurant closures make up a large chunk of those in the state so far in 2023, Astley said the city shouldn’t be too concerned. As the largest city in the state with more restaurants per capita than other cities, it’s not unusual to see that just over one-third of the restaurant closures this year have been in Portland.
Although things have not exactly returned to the pre-pandemic “normal” in the restaurant industry, Astley said some positive things have resulted from the change.
Restaurant owners have always had to be innovative and these new challenges are forcing them to adapt in more creative ways than in the past. They’re finding ways to deal with higher costs and lower foot traffic and are working with city officials to promote public support of their businesses.
“They’re dealing with it and I think you’re still going to continue to see great restaurants in Portland and around the state of Oregon,” Astley said.
Already in 2023, 188 restaurants have reopened, showing that many are still coming back after the pandemic.
Even Zell’s Cafe, the Portland brunch spot that announced its upcoming closure, said this isn’t the end of the road. The company said it is reimagining the space and will return with a different concept at some point.