Omicron Is Causing Phoenix Restaurants Staffing and Supply Chain Issues

Local restaurants are making significant changes in the face of staffing shortages and supply chain issues tied to the recent surge of the COVID-19 Omicron variant.

That means shorter hours and fewer indoor dining options across the metro Phoenix area, according to Lori Foster, director of business relations for Downtown Tempe Authority.

“It’s such a weird time right now,” she says. “The Omicron variant has caused a lot of businesses to be flexible and figure out new ways of selling, whether that’s online or adding delivery service.”

Several restaurants opted to temporarily close indoor dining spaces during early pandemic days as the country went into lockdown mode. But that’s not the current trend, according to Thomas Barr, vice president of business development for Local First Arizona.

“We’re not seeing a wave of closures right now,” says Barr. “Instead, we’re seeing restaurants minimizing their hours and maximizing the staffing that they have.”

Both Foster and Barr are seeing more restaurants consolidate their hours. That way, they have fewer hours to staff during the week. “Some restaurants are closing on Monday and Tuesday, and even Wednesday, or just opening during the evenings and the weekends,” explains Barr.

There’s another factor impacting the changes in hours, according to Foster.

“Until we see a return of office workers, restaurants will likely adjust their hours because they have fewer customers,” she says. “Some restaurants aren’t even opening for lunch anymore because of the low traffic.”

In some cases, staff shortages are caused by employees staying home because they’re sick. But that’s not the only reason, according to Michael McQuarrie, director of the Center for Work and Democracy at ASU.

“Some workers are reevaluating their time in light of the pandemic, and deciding they just don’t want to take the risk,” McQuarrie says. Hence, some restaurant owners are taking steps to increase employee retention. “Some restaurants have aggressively raised wages and benefits.”

McQuarrie notes that higher staffing costs typically mean lower revenues for restaurant owners, unless they’re passing those expenses along to customers through higher food and beverage costs. But he’s also thinking about the big picture, hoping vulnerabilities heightened by COVID-19 will lead to increased social infrastructure.

Meanwhile, the ebb and flow of restaurant openings and closings continues around the Valley.

Foster says several new restaurants have opened recently around Mill Avenue.

For example, during the final quarter of 2021, the area around Mill Avenue saw eight businesses open and three closed. Three of those openings were restaurants, as were three of the closures.

In some cases, business owners who’ve leased empty spaces are getting ready to open new concepts. That’s the case at the Andre Building, where the former Rula Bula space will be getting three new concepts from restaurateur Julian Wright.

He’s opened other concepts during the pandemic, as well, including Luckys Indoor Outdoor and Sake House in Roosevelt Row, where other recent openings have included Barcoa Agaveria and Sottise.

“In some cases, COVID-19 is just one factor when a business decides to close,” according to Foster. She says that’s the case with P.F. Chang’s on Mill Avenue, which decided to leave when its lease was up because it wasn’t getting optimal traffic in the area even before COVID-19 surfaced in early 2020.

In addition to shifting their hours, some restaurants are taking extra steps to help patrons feel safer while dining indoors. “We’re seeing a very conscious consumer base that wants to know how safe a particular restaurant is before they eat there,” says Barr. Hence they’re asking about things like mask policies and spacing between tables. “The more comfortable people feel, the more likely they are to eat out.”

Barr notes that financial support has helped numerous food and beverage businesses dealing with Covid-19 impacts. “A lot of businesses are getting grants that help with recouping some of their losses, but in many cases, they’re still struggling.”

Despite the challenges, Foster feels some optimism knowing that local business owners are adapting to changing COVID-19 conditions on the ground and continuing to demonstrate considerable resilience.

“I’m pretty bullish on things,” says Foster, “but with the caveat that there are a lot of businesses struggling, especially the mom and pops.”