Four years since the start of the COVID-19 pandemic, Wisconsin bars and restaurants overall have made a strong financial recovery, while worker retention remains a top concern, according to a recent study. report for him Wisconsin Policy Forum.
The report highlights the continued recovery of the state’s food and beverage service industry, which was among the hardest hit by the pandemic and subsequent government-imposed operational and capacity restrictions. It focuses on three main areas: employment, sales and the number of restaurants and bars in the state.
Employment numbers are back, staffing challenges persist
Overall, employment at Wisconsin restaurants and bars has returned to pre-pandemic levels. In February, the sector employed 203,700 workers, exceeding February 2020 totals by about 900 or 0.4%, according to the report, which cites data from the U.S. Bureau of Labor Statistics.
The industry’s seasonal employment peak this year will be more telling. Its most recent peak was in August 2023 with 218,100 workers employed, but it was still just below the August 2019 pre-pandemic high of 219,200.
“Despite this recovery, leaders of Wisconsin restaurant and bar associations say staffing remains a top concern for the businesses they represent. “Many restaurants and bars have raised wages, but still find it difficult to compete and retain workers,” according to the report.
This is despite better wages across the industry following rapid wage growth immediately after the pandemic, due to high demand for workers and high inflation. Between 2019 and 2022, median annual wages in food preparation and serving occupations in Wisconsin increased 29.8%, far outpacing both wage growth across all jobs (16.8%) and inflation during that period ( 14.5%).
As bar and restaurant job openings have declined since 2022, wage growth has slowed. The report points to data released in April showing that average annual wages for employees in food preparation and serving occupations increased just 4.2% in 2023, in line with the pace of growth for all occupations.
Sales on the rise
In their quest for continued recovery, bars and restaurants have found ways to make more with less.
As a result of inflation and higher menu prices, consumers have become more selective about where and how often they spend their discretionary income, leading to fewer sales transactions and smaller orders at restaurants. Additionally, thanks to staffing challenges, many restaurants have limited their operations to fewer days or fewer hours than before the pandemic.
Despite those limiting factors, the report suggests that restaurants and bars are making about the same amount of money, or even more, than they were before the pandemic. Total state revenue generated by restaurants and bars in Wisconsin exceeded $578 million in 2023, up 17.3% from 2019, according to preliminary data on state sales tax collections.
“However, that was slightly below the pace of inflation (19.2%), and growth was stronger in other industries subject to the sales tax, with overall tax revenues increasing 26.6% during that period “, according to the report.
The report cited interviews with the state’s bar and restaurant associations that noted that “many businesses discovered during the pandemic that they could have similar results with reduced hours and are now more cautious about the days and times they open.”
By the numbers
Thanks to federal aid offered to businesses as relief from the financial devastation of the pandemic, most Wisconsin bars and restaurants have managed to stay in business. In fact, as of the third quarter of 2023, the number of these establishments was 1.6% higher than the same quarter of 2019.
However, it appears that the number of bar establishments in Wisconsin is declining. The report finds a 6.6% decline in the number of establishments classified as “Drinking Venues (Alcoholic Beverages)” from 2019 to 2022 (the most recent data available, while the broader set of all “Food Services” and drinking places” fell 2.3%.
“Even if bars recovered in 2023 at a similar pace to restaurants, there will likely still be fewer than before the pandemic,” according to the report.
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