Omnibus Appropriations Package Leaves Out RRF Replenishment
Over the past several weeks, members of the Vermont Chamber and Vermont Independent Restaurants (VTIR) met with the offices of Senator Leahy and Senator Sanders and have been in communication with Congressman Welch’s office, advocating for replenishment of the Restaurant Revitalization Fund as part of the omnibus appropriations bill. Unfortunately, funding for RRF replenishment was not included in the bill, which is expected to be signed by President Biden on Friday. Advocacy efforts will shift toward getting replenishment included in later COVID relief or a small business package originating in the House.
Sue Bette Named Top Influential Restaurant Executive
Vermont Chamber member, and co-founder of the Vermont Independent Restaurants, Sue Bette, has been ranked one of the most influential restaurant executives nationwide. The annual list is voted on by peers in the restaurant industry and released by Nation’s Restaurant News. The 2022 selection emphasized “people who are evolving the restaurant industry through fresh ideas and game-changing approaches to leadership, workforce, equity and inclusion, investment, restaurant technology, supply chain, growth models and more.”
Sue, the Founder and Head Coach of Bluebird Hospitality, has been a champion for the industry throughout the pandemic, leading the advocacy effort that prompted the creation of the Restaurant Revitalization Fund. She remains outspoken on the need for replenishment of the fund, as the industry continues to suffer the ongoing effects of the Covid-19 pandemic.
The complete list of restaurant executives is available here.
Vermont Restaurants Need Help Now, and the Way Forward Is Clear
By Leslie McCrorey Wells
As the co-owner of Burlington restaurants, Pizzeria Verità, Trattoria Delia, and Sotto Enoteca, I know how hard this past year has been on our industry partners. During the first 18 months of the pandemic, we furloughed staff, lost revenue, and accumulated debt. At the same time, we worked harder than ever to adapt, pivot, and persevere to keep our businesses viable and our workers and customers safe. Even with the extraordinary challenges faced by Vermont’s independent restaurants, we were lucky. We received funding through the first round of the Restaurant Revitalization Fund (RRF), which has been instrumental in helping our businesses to survive.
Only 366 of the 947 Vermont restaurants that applied for RRF relief were awarded funds, leaving a $120.5 million hole in our state’s restaurant industry. Oversubscription was anticipated, which is why before the RRF’s creation many congressional and federal leaders promised a follow-up replenishment package. Unfortunately, Congress continues to drag its feet when it comes to advancing RRF replenishment.
Now, we need help. Congress must make replenishing the Restaurant Revitalization Fund a priority, and our Vermont Congressional delegation, Senator Patrick Leahy, Senator Bernie Sanders, and Congressman Peter Welch, are in key positions to do this. Vermont’s restaurants are some of our most prized economic forces. 1,400 strong at the beginning of the pandemic, we operate on razor-thin margins to turn millions of dollars in food purchases (nearly $10 million of which is locally produced) into over $1 billion in annual sales. Along with drinking establishments, this mighty engine provides a dynamic experience for Vermonters and visitors and contributes to the health of our communities in so many ways – not the least of which is collecting local and State tax revenues. Our legislators know this, and they acted swiftly and boldly to support our restaurant industry at the onset of the closures. Why stop the support short of the finish line?
Restaurants have suffered devastating fallout from the pandemic, and the impact of nearly two years of operating restrictions and closures will continue to be felt for months and years to come. Nearly 75% of Vermont restaurants have not experienced a complete sales recovery, reporting that their businesses are still less profitable than they were prior to the pandemic. The RRF picked winners and losers, with recipients left in a stronger economic position than applicants who did not receive funds. Too many restaurants are operating on borrowed time, and we cannot afford to lose another one.
The Vermont Independent Restaurant Coalition is calling on Senator Patrick Leahy, Senator Bernie Sanders, and Congressman Peter Welch to immediately replenish the RRF, as was promised by state and federal leaders. While our delegation in Vermont is not the largest in the nation, our leaders hold key budgetary positions, and their support is critical to passing RRF replenishment.
Replenishing the RRF will keep our restaurants open, help workers stay employed, and protect the vibrancy of Vermont.
Leslie McCrorey Wells is the co-owner of Burlington’s Pizzeria Verità, Trattoria Delia, and Sotto Enoteca, and a member of the Vermont Chamber of Commerce and Vermont Independent Restaurant Leadership Council.
Omicron variant negatively impacted business conditions in Vermont
The omicron variant led to a rapid deterioration in business conditions for restaurants in Vermont. 89% of restaurants experienced a decline in customer demand for indoor on-premises dining in recent weeks, as a result of the increase in coronavirus cases due to the omicron variant.
Vermont restaurants took a number of actions in recent weeks, as a result of the increase in coronavirus cases due to the omicron variant:
51% reduced hours of operation on days that it is open
56% closed on days that it would normally be open
31% reduced seating capacity
20% changed to only offering off-premises for a period of time
As a result, 77% of operators say business conditions for their restaurant are worse now than they were 3 months ago. Only 2% say business conditions improved during the last 3 months.
This was on top of the cumulative effects of nearly 2 years of pandemic-induced challenges:
59% of operators say their restaurant accumulated additional debt since the beginning of the COVID-19 outbreak in March 2020.
57% of operators say their restaurant fell behind on expenses since the beginning of the COVID-19 outbreak in March 2020.
73% of operators say their restaurant is less profitable now than it was before the beginning of the COVID-19 outbreak in March 2020.
The Vermont restaurant industry’s recovery is incomplete
A majority of restaurants have not experienced a complete sales recovery to pre-pandemic levels. 72% of operators say their sales volume in 2021 was lower than it was in 2019. Only 23% of operators reported a same-store sales increase between 2019 and 2021.
Much of the sales growth in 2021 was driven by higher menu prices, as restaurant operators were forced to offset sharply rising costs throughout their restaurant. 80% of operators say their restaurant’s total costs (as a percent of sales) were higher in December 2021 than they were in December 2020. Only 8% of operators reported lower costs.
Customer traffic levels also remained below 2019 levels for most restaurants. 75% of operators say their customer traffic in 2021 was lower than it was in 2019. Only 22% of operators reported an increase in customer traffic between 2019 and 2021.
The Restaurant Revitalization Fund saved many businesses and jobs in Vermont
100% of RRF recipients said the grant made it more likely that they would be able to stay in business during the pandemic.
85% of RRF recipients said the grant helped them retain or hire back employees that would otherwise have been temporarily or permanently laid off.
The National Restaurant Association estimates that over 3,000 restaurant jobs in Vermont were saved as a result of the initial round of Restaurant Revitalization Fund grants.
88% of RRF recipients said the grant helped them pay expenses or debt that had accumulated since the beginning of the COVID-19 outbreak in March 2020.
69% of RRF recipients said the grant was sufficient to cover all of their lost sales since the beginning of the COVID-19 outbreak in March 2020.
A replenished Restaurant Revitalization Fund would save more businesses and jobs in Vermont
54% of restaurant operators that applied for an RRF grant but did not receive funding said it is unlikely that they will be able to stay in business beyond the pandemic, if they do not receive a grant through the Restaurant Revitalization Fund.
88% of restaurant operators that applied for an RRF grant but did not receive funding said a future grant would enable them to retain or hire back employees that would otherwise have been temporarily or permanently laid off.
The National Restaurant Association estimates that future grants awarded after a full replenishment of the Restaurant Revitalization Fund will potentially save more than 4,000 restaurant jobs in Vermont that are currently at risk.
(Source: National Restaurant Association, national survey of 4,200 restaurant operators conducted January 6-18, 2022)
Restaurant employment continued to trend higher in December, but overall staffing levels remained well below pre-pandemic readings. Eating and drinking places added a net 42,600 jobs in December. The industry is roughly 650,000 jobs below pre-pandemic staffing levels. Read the full analysis from our federal partner, the National Restaurant Association.
The Department of Labor’s new dual jobs regulation that took effect December 28 states that restaurants cannot take a tip credit for the time spent on tasks considered “directly supporting work” that exceeds 20% of the workweek or 30 continuous minutes. Last November, the Restaurant Law Center filed an emergency lawsuit challenging the regulation and asking for an immediate injunction. It is expected that the court will allow the new regulations to remain in effect until February.
It is important to continue to take steps to comply with the new rules. Actions to consider taking include:
Conducting an audit of the job duties performed by your tipped employees.
Training managers on the new requirements.
Implementing new policies and procedures on side work.
Changing staffing model to hire new staff to perform side work tasks.
Adopting new timekeeping protocols for tipped employees.
Legislative Changes to Unemployment Insurance Could Hurt Small Business Recovery
The Unemployment Insurance (UI) Study Committee issued a preliminary report outlining two possible ways to update weekly benefits and funding. Both options would raise the weekly minimum and maximum benefit amounts for claimants. The Committee explored paying for this change by decreasing unemployment insurance contributions by roughly $100 million over 10 years while creating a surcharge directed to a special fund to provide for increased benefits.
The Vermont Chamber has protected the integrity of the UI Trust Fund and will work to secure unemployment insurance rate relief to help Vermont businesses have a safe and robust recovery.
Economic Advancement Through Liquor Law Modernization
Last session, a significant liquor law modernization bill was signed into law. There were several provisions that positively impact businesses and serve as economic recovery tools such as a temporary measure to allow alcohol to-go until 2023. While Act 70 signified a major progression, there were important provisions left on the table that the committees of jurisdiction did not have enough time to fully consider. This includes allowing low-alcohol spirit beverages (ready to drink canned cocktails) to be sold by the same retailers that sell beer, wine, and hard cider, and allowing small Vermont distillers to ship directly to consumers. Permitting Vermont distillers to do so would bring Vermont in-line with other states that have already passed a similar measure. Discussions around these provisions will continue this session. Continued adjustment and modernization of alcohol regulatory and financial policies is a priority for both the Vermont Chamber and our partner, Vermont Independent Restaurants.
The DOL’s new tip credit regulations went into effect on December 28th. The regulation states that restaurants cannot take a tip credit for the time spent on tasks considered “directly supporting work” that exceeds 20% of the workweek or 30 continuous minutes.
While the NRA filed an emergency lawsuit in a Texas federal court challenging the rules and asking for an immediate injunction while the case is being considered, it is expected that the court will allow the new regulations to remain in effect until February.
It is important to continue to take steps to comply with the new rules. Actions to consider taking include:
Conducting an audit of the job duties performed by your tipped employees.
Training managers on the new requirements.
Implementing new policies and procedures on side work.
Changing staffing model to hire new staff to perform side work tasks.
Adopting new timekeeping protocols for tipped employees.
Vermont Businesses Double Down on Digital Presence This Holiday Season
By Amy Spear, Vermont Chamber of Commerce
Every holiday season, restaurateurs, retailers, and other small businesses encourage customers to shop local, with the shopping season formally kicking off with Small Business Saturday. As COVID challenges continue to plague businesses in all areas of operation from employee recruitment to competition for sales against giant online marketers, Vermont’s small business community is getting creative and taking advantage of the digital marketplace.
As the Vice President of Tourism for the Vermont Chamber of Commerce, I’ve witnessed our members doubling down on digital engagement to compete this holiday season for job recruitment, customer retention and engagement, and creative purchasing opportunities. Vermont makers and merchants have embraced an innovative spirit to meet their challenges head on.
Whether it’s maintaining and building relationships with customers or helping shoppers to experience the wonder of Vermont in person, developing a robust online presence is not only convenient and entertaining, but also essential. As Vermont businesses are geared up to launch marketing campaigns with traditional paid ads supporting their local newspapers, radio, and television stations, they have also turned to social media tools to entice customers to buy products or visit their retail locations.
For example, digital innovations boosted Lawson’s Finest Liquids’ ability to build and maintain relationships with its customers. Lawson’s Finest is known for producing high-quality craft brews, like their Sip of Sunshine IPA and unique maple brews. But as they continue to build their brand and reach, they’re using Facebook Live to regularly host conversations with their customers and answer their questions. And they’re promoting their “Tuesday Tunes” and “Open Mic” nights via Facebook Events.
Additionally, at the pandemic onset, they pivoted to online sales through their website and developed a curbside pick-up service to support their retail business which made some customers more comfortable not to have to go into a retail outlet. Lawson’s Finest even used their digital communications channels to launch a brand-new brew – Little Sip IPA – during the pandemic. By using creative promotional giveaways and scavenger hunts they were able to connect directly with fans to encourage them to try their new beers.
As with many specialty food businesses, Lake Champlain Chocolates maintained operations throughout the pandemic, providing consistent employment for their long-time staff as well as continued support of the broader community by using locally sourced ingredients like Vermont honey and maple syrup in their handcrafted products. Lake Champlain Chocolates has been hosting virtual chocolate tastings via Zoom, something that has caught on with corporate groups. They added new digital features to their website to provide a better virtual shopping experience for their customers and are promoting “order online pick up in-store” purchases through local Google pay-per-click campaigns, OTT (over-the-top) advertising through streaming video, paid social media, and local digital advertising like Front Porch Forum.
Deploying marketing tactics over social media to attract new employees has also gained momentum, especially with holiday sales ramping up. There are many holiday season employment opportunities, and Vermont’s employers are turning to LinkedIn, Facebook Jobs, and Indeed to connect with job seekers.
Vermont’s businesses fuel our economy by offering quality goods and services while at the same time providing good-paying jobs. These employers also provide financial benefits that in turn help to create sustainable and engaging communities. Our hope is that this holiday season, and beyond, Vermonters and tourists alike go out of their way to support our local businesses as they are an integral part of our greater community.
While supporting Vermont’s retailers, restaurateurs, and other businesses during the pandemic has been incredibly important, it’s even more vital to support the surviving small businesses now. There are plenty of ways our small businesses offer virtual engagement and shopping, so go find them online. This holiday season, you can support Vermont businesses in person – or right from your home.
Amy Spear
Amy Spear, of Killington, is the Vice President of Tourism at the Vermont Chamber of Commerce, whose mission is focused on creating an economic climate conducive to business growth while enhancing Vermont’s quality of life.
McCrorey Wells is the co-owner of Burlington’s Pizzeria Verità, Trattoria Delia, and Sotto Enoteca, and a member of the Vermont Chamber of Commerce and Vermont Independent Restaurant Leadership Council. 
