Bars and restaurants brace for winter slowdown amid ongoing pandemic

Yahoo Finance's Dani Romero reports on the struggles restaurants and business owners are having in getting back on their feet heading into the winter amid the ongoing pandemic.

Video transcript

ALEXIS CHRISTOFOROUS: It is no secret that restaurants are facing headwinds from just about all sides, though, supply chain disruptions, labor shortages, inflation. Some are calling this a very shaky time. For more on the state of restaurants, joining us now is Yahoo Finance's Dani Romero. So Dani, I know you've been out and about, talking to a lot of business owners, especially as we enter the colder weather. What are things looking like for them?

DANI ROMERO: I mean, Alexis, you said it. It is a very shaky time for so many of these small business owners. I actually spoke with a restaurant owner up in the Bay Area in San Francisco, California, that says that she doesn't have enough foot traffic to keep her doors open at least six days a week. And she actually blamed it on the hourly hike of wages in her area. In San Francisco, it's about $16.35 per hour. And she says that most people in that area will work between $18 to $20 an hour.

But like she put it, she's selling an empanada that's $8, as well as a coffee for $2. So to have someone work during that time, it just really doesn't benefit her to work, you know, all six days. So instead, she's cut down her hours to only working three days a week. And she also said that she doesn't have that competitive edge that compared to the so-called larger companies to really attract that new labor force.

And so she did note that she has currently full-- she is fully staffed right now. But she also hasn't passed on those expenses to her customer just quite yet. She said that in her area, the backlash is actually really serious when it comes to hiking up those prices. And so, you know, like I said, it's still really uncertain for a lot of these business owners that are continuing to survive during this pandemic.

ALEXIS CHRISTOFOROUS: And one way they've been doing it, of course, is outdoor dining. I mean, here in New York, so many restaurants still have their outdoor setup, even though it's starting to get pretty cold here in the city. What about the future of outdoor dining?

DANI ROMERO: Yeah, you brought up a really good point. In San Francisco, actually, the al fresco program has become a permanent fixture. And so what I'm hearing from business owners especially in that area is that while the program has really good intentions, now it's coming with a cost, because they're going to have to pay for licensing and new rules that come along with this program. And like you said, in New York, you have the same thing going.

And so, but in New York, there's a lot of backlash and a lot of debate that's going around this program. And so when the winter does roll around, you know, like I said, there's still a lot of uncertainty if US consumers will actually go out to the restaurants and eat outside. And back to the New York point, you know, in New York, the city announced that they can no longer use propane, that you would have to use electrical heaters, which are less powerful. So, like, again, it's still really uncertain for a lot of these business owners.

ALEXIS CHRISTOFOROUS: Lots and lots and lots of question marks. Dani Romero, thanks for those insights.