On March 17, just nine days after its five-year anniversary, Breaker’s Breakfast, Lunch and Brunch was forced to close. As the pandemic raged, the Rockaway Beach diner’s doors would stay shut for nine months. But even after reopening last fall, the struggle wasn’t over.
During one week, a supplier told co-owner Robby Bancroft there was no bacon. The next, there was no bread.
“Can you imagine Breaker’s without bacon?” Bancroft said. “We’re not even thinking about profits; we’re just trying to serve what’s on our menu.”
The COVID-19 pandemic has decimated small businesses, with restaurants among the hardest hit. In San Mateo County and across the state, COVID-19 forced dining rooms to close, move tables outside or enforce capacity limits, with rules subject to change day by day. Many local owners closed up shop or operated in the red while pivoting in response to changing restrictions.
In Pacifica, where locally owned small businesses are at the heart of the community, the story was the same. For many, the only lifeline was government relief.
The Restaurant Revitalization Fund, a federal program administered by the Small Business Administration, provided $7.5 million in grants so far this year to Pacifica restaurants that suffered financial losses due to the pandemic. The program is part of the American Rescue Plan Act, and promised funding equal to pandemic losses up to $10 million per business. After more than a year of restrictions, the money proved to be critical for local restaurateurs.
“It’s nearly impossible to sustain service workers in a food business,” said Joshua Kizler, who owns Intertwine Cafe and received grant money from the fund. “It’s so difficult to survive.”
Kizler said he used the funds primarily for payroll, rent and inventory for his Palmetto Avenue coffee shop. That’s what they were designed for, and so long as the money is used for operations expenses like utility payments or cleaning materials before March of 2023, the funds don’t have to be repaid.
Kizler rattled off just some of the costs tied to food service, from wages to taxes to workers compensation, business insurance, rent, permits, utilities, maintenance, inventory and equipment. Add on new costs like personal protective equipment and outdoor dining, and the list can seem daunting.
Beth Lemke, who owns Pacifica wine bar A Grape in the Fog, said she was suddenly investing in heaters and propane as she moved her business outdoors to keep customers coming during the pandemic. Some business she simply lost to bad weather. With all the work and money invested into the outdoor space, Lemke is crossing her fingers that the city will extend its outdoor dining program after it expires at the end of the year.
Bancroft shared the numbers: 90 percent of restaurants fail in the first year, and most don’t start to pull a profit until five years in, if they’re among the minority that even make it to the fifth year. That’s why closing just as Breaker’s sixth year was underway felt so devastating to Bancroft, who opened the restaurant with his father in 2014. But Bancroft said even after you’ve “made it,” the restaurant industry isn’t as profitable as it might appear. The margins in general span from zero to 15 percent, with the average around 3 to 5 percent.
The most expensive part of running a restaurant, said Nick’s Restaurant owner Chuck Gust, all happens before any customer walks in the door. The cumulative costs of electricity, refrigeration, water and food preparation all add up, no matter how many customers walk in the door. The cost to set up outdoor dining, not even including the food, came out to around $20,000, he said. He said he spends around $1 million a year in labor alone.
“When we turn on the lights, I don't care if you do 30 covers or 300,” Gust said. “The place is still functioning. … Conservation is a nice thought, but it’s not practical.”
The cost of staffing, and investing in training new staff, usually accounts for the bulk of his expenses. Before the pandemic, Nick’s had more than 70 employees for its 400-capacity restaurant and bar. Now, only possible with the relief money, the restaurant is making do with just 60, more than a quarter of whom are brand- new. Bancroft is now operating with just nine of his 21 former employees. Gust and Bancroft said that’s the value of the grants — so that even while facing losses around 60 percent, Nick’s and Breaker’s can continue to serve the community not just through food and hospitality, but with jobs.
“What this (money) does, it just brings this sense of stability, of hope, that we will be able to keep our doors open, protect those jobs, and keep serving the community,” Bancroft said.
Gust said the relief money will be enough to keep Nick’s doors open, too, so long as he’s allowed to operate. Even amid a crashing industry, none of the restaurateurs were willing to give up easily, least of all Gust, whose restaurant has been a family-owned Rockaway Beach staple for 94 years. With the grant money, the support of the Pacifica community and the business owners’ tenacity, many of Pacifica’s most beloved restaurants will stay in service.
“We’re just taking it week by week, and just grateful to be in the situation we are in,” Bancroft said.