‘Chefs are nonexistent,’ says local restaurant owner

Recent labor report shows high rate of quitting among hotel, restaurant workers

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In the past nine months, Alexander Hall has opened two new restaurants in Clive: Franka Pizzeria and St. Kilda Bakery & Cafe. 


While Hall has been able to find staff to work in the dining area of the two Clive restaurants and his three other locations, finding and keeping chefs as well as other “back of house” staff has been difficult.


“The chefs are nonexistent,” Hall said during the Business Record’s Project515 virtual discussion in early June on the retail and service industries. “We could hire 10 chefs right now. We’ve had the problem where they’ll come for the interview, they’ll come for the trial, we offer them a job and they just don’t turn up.


“We hired three people [recently] and they didn’t turn up on opening day.”


The struggle to find restaurant staff is not unique to Hall. Restaurants nationwide are having similar experiences.


According to U.S. Bureau of Labor Statistics data from April, 5.6% of people who worked in the accommodation and food services industry quit their jobs, the highest percentage of any sector listed. (The quit rate for all private industry sectors in April was 3.2%.)


More specifically, between December 2021 and April 2022, nearly 3.9 million people who had worked in accommodation and food services quit their jobs. The professional and business services sector had the second-highest number of people quitting their jobs at 3.7 million.


The job opening rate in the accommodation and food services sectors was 9.9% and 9.2% in March and April, respectively, according to the labor department. The rates were the highest among all the sectors monitored.


“Nobody’s seen anything like this before,” Jessica Dunker, president and CEO of the Iowa Restaurant Association, said in a separate interview. “It isn’t even about wages anymore. Our wages are going up steadily. … People don’t want to come back and work in our industry.”


Hall, who operates three St. Kilda’s and two Franka Pizzerias in the Des Moines area, said the people who work in the restaurants’ kitchens are working long hours. He said he’s also now working five days a week filling in where needed in the five restaurants.


“What’s happening now is other restaurateurs are starting to pay too much for labor because they are trying to get the labor, and this crunches labor costs,” Hall said. “We’re all … just trying to keep the employees we have very happy.”


Late last week, online hiring platform Indeed.com listed 38 full-time job openings for chefs in the area, with annual salaries ranging from $35,000 to $100,000. Several listings noted they were “urgently hiring.”


Dunker said it’s becoming increasingly common for restaurant managers to try to entice workers away from competitors with attractive benefits packages and higher pay. For a while, restaurants will be able to charge higher prices to cover the wage inflation and skyrocketing costs of food and supplies, she said. 


“We’re starting to approach that threshold of what people will pay for a pizza or sandwich,” Dunker said. “Right now, we’re not seeing reduced bodies coming through the doors. [Customers] are ordering differently: They are drinking water. They aren’t getting an appetizer. They’re not tipping as generously. 


“They’re still coming out, but that can change. And then we have a whole lot of other issues.”

 



Project515 panelists talk about Valley Junction, East Village


The Business Record in early June hosted a virtual Project515 panel discussion on the retail and service sector. The conversation was moderated by Senior Staff Writer Kathy Bolten. The following are excerpts of panelists’ responses to questions they were asked.


Tyler and Aaron, you both attended the International Council of Shopping Centers real estate convention in Las Vegas in May. Share a couple of your top takeaways from that convention.

 

Aaron Hyde: The whole narrative of store closures is behind us. Now we’re looking forward to “Hey, we need to open brick-and-mortar stores” because we need to have that customer engagement, that customer experience, but also the service – the omnichannel systems these retailers have in place. The second thing we heard was about the supply chain. [Retailers] are trying to open up X number of stores but [they are saying], “We don’t know when we’re going to get the stores open because we don’t know how long it’s going to take to get our HVAC units or all the products we need to open our stores.” The two takeaways are people are opening stores and they just don’t know when they can get them open.


Tyler Dingel: I think the biggest issue we’re having right now is … what the cost of new construction has done to the market. In the past 10 years we’ve seen a 44% increase in retail sales, which is huge. Retailers are doing well. … At the same time, we saw a 4% increase in the amount of retail space available. The space available has really just not kept up. You can look around our market as well and see that we haven’t had a lot of new retail developments of size. 


You have some smaller strip centers, but these larger retail developments have not happened. One of the biggest hurdles is getting these tenants to understand that if you want to be in a new store in a new market, the cost is going to be quite a bit more than what you’re used to paying in a product that was 60% of the cost five years ago.


Cassie, tell us a little bit about that and what the temperature or mood is of East Village business owners right now.

 

Cassie Sampson: [On a nice day,] there’s a lot of traffic on the sidewalks. Restaurants are busy. [East Village Spa] is at capacity just about every day of the week. We have a wait list of eight to 10 every day of the week, plus a longer wait list for Saturdays. We are just about fully staffed but we still have COVID taking out employees for 10 days at a time. … That’s a challenge, and it’s a challenge in the East Village. 


Occasionally you’ll see sign up that a business is closed early due to a lack of staffing. We’re all noticing that some of our busier days are shifting. Our weekends are still busy, but I think with people having work from home [options] they’re able to sneak in a shopping trip on a Tuesday afternoon or come to the spa on a Thursday at 3 o’clock and then go back home and work.


Steve, talk a little bit about the changes occurring in West Des Moines’ Valley Junction shopping district. 

 

Steve Frevert: The past two years we’ve seen a number of mixed-use buildings go up [with commercial on the ground level and residential on upper levels]. First National Bank will be opening their new building at Fifth and Elm soon. At 315 Fifth [St.] is a mixed-use building with 10 apartments that I believe are all rented, and a wealth management firm is going in on the second floor and we’ll be getting our first bookstore [in Valley Junction] on the first floor. There’s also going to be bar space. … 


The city of West Des Moines’ master plan steering committee has done a lot of work and put forth design guidelines that are really going to guide the appearance of the buildings that are being put up as well as preserving some of the historic character we have. That’s really crucial.


Panelists talked about the East Village, an area between the state Capitol complex and the Des Moines River that includes retail, service-oriented businesses, restaurants and bars.

 

Alexander Hall: East Village is by far my least-performing store. That store, before COVID, we switched from one brand to another brand, thinking pizza would be better. … [A St. Kilda’s Cafe had been located at 111 E. Grand Ave. Now Franka Pizzeria is located in the space.]


We lost a lot of lunches. We used to have a very good lunch business there. We do good business at night and on the weekend, but the lunchtime business – there’s not one car parked on that whole street, especially in the winter. We’ve struggled in the East Village. … The East Village really needs to have a look at what its identity is. … Valley Junction has done a really excellent job of getting everybody to work together as a team. The East Village doesn’t seem to have quite as good of leadership as Valley Junction does. … We would like to see more retail, [but] the problem is that the lease rates are so high that only restaurants can go in. Retail has trouble paying $30 a foot. So they put more restaurants in and it dilutes the customer base. … [The East Village] needs more retail. We need hair salons. We need some different things to drive more traffic.


Cassie Sampson: Valley Junction is lucky to have Steve [Frevert]. The East Village doesn’t have an office. We don’t have any employees. … It’s just volunteer-based organizations. That’s a differentiating part of the Village. I’ve been here since 2007. 


[There were a lot of unique businesses in the East Village’s early days, such as Raygun, Gong Fu Tea and others, Sampson said.] They were the visionaries. They made [the East Village] cool. … The unfortunate irony is when a neighborhood gets really desirable … it drives up the lease rates … and it makes it harder to attract more businesses like the ones who were visionary. 


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