How have small restaurants adapted to years of turmoil?

The years of COVID-19 have been and continue to be tough for the restaurant business: Quarantines, labor shortages, inflation, and now rising flu and COVID-19 cases have all added to the industry’s woes.

Restaurants are trying to adapt in various ways. How successful have they been? To see how catering businesses, especially small businesses, are coping with tough times, we looked at two businesses, The Pancake Pantry in Nashville and TJ’s Southern Gourmet in Englewood, New Jersey.

The owner explained that Pancake Pantry has been particularly successful in adapting to the new world order of the restaurant industry. Focus on online ordering and takeout and partnering with startup delivery service DoorDash, (SPEED)— even helped expand its client base.

“One of the biggest aspects of the pandemic is [that] It allows wider access for our guests who can’t come,” Bradley told Yahoo Finance Live during the Small Business Spotlight segment (See video above). “We learned a lot about how restaurants need to adapt quickly. If you didn’t adapt quickly at the start of the pandemic, then you were almost dead in the water, so we adapted quickly.”

The strategy seems to have worked for Bradley. While nearly 90,000 restaurants have closed since the start of the epidemic, per capita National Restaurant AssociationThe Pancake Pantry has opened a second Nashville location.

TJ’s Southern Gourmet has a different story to tell, and it reflects the industry’s many struggles. In other words, the results are mixed.

“Honestly, we do it one day at a time,” owner Tia Jackson told Yahoo Finance Live.

TJ’s, for example, now offers corporate catering, which Jackson hopes will help the restaurant survive.

“There are companies that want to move our restaurant to their corporate offices. And so we partnered with some of them to focus more on corporate catering,” Jackson said.

In addition to the traditional and crucial in-person dining on Fridays, Saturdays and Sundays, Jackson hopes the catering operations will “give us a nice balance over time to get over this bump.”

But both businesses face the same problems. inflation increased by 7.1 percent compared to a year ago, causing the prices of everything from food ingredients to labor to rise.

“The biggest challenge in the Nashville market – and that’s pretty much everywhere – is the cost of food,” Bradley said. “You know, a year ago an egg cost me $0.10. Today an egg costs me $0.37.”

Jackson of TJ’s added: “What used to cost me $20 now costs $100 and, you know, it’s hard. It has become difficult not to exceed these costs, or at least not to share the costs with our customers who mostly understand.”

The labor shortage also poses a serious threat.

Industry, 462,000 restaurant jobs below pre-pandemic levels, According to the National Restaurant Association. Jackson said he would continue to struggle to manage TJs if he couldn’t hire more workers. “I just hope this ends soon,” he said. “But we’re doing our best to try to get the balance we need to get through this.”

Same for Bradley and The Pancake Pantry, who are struggling to retain workers. “We’re paying a lot more per hour than we’ve ever done,” he said.

Despite facing challenges and possibly another winter of rising COVID-19 rates, restaurant owners remain optimistic. Bradley, for example, said his second position was a hit.

“You know, opening a second restaurant in a pandemic is unheard of, we had a lot of success opening our restaurant last year,” Bradley said.

While TJ’s Southern Gourmet struggled, Jackson said his job went beyond work and even food.

“One of the things that I thought helped me was knowing why I started this in the first place, connecting with our customers, and reminding myself every day that this is even bigger than the food we serve,” Jackson said. “This is about connecting with our customers.”

Dylan Croll is a reporter and researcher at Yahoo Finance. follow him on twitter @CrollonPatrol.

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