Wisconsin’s bars and restaurants continue to recover from the devastating economic impact of the COVID-19 pandemic, but some impacts still linger.
That’s according to a new report from the Wisconsin Policy Forum, a nonpartisan, nonprofit public policy research group based in Madison.
Here’s what you need to know.
Jobs are returning – especially during the summer
“After a long and slow recovery, employment at Wisconsin restaurants and bars has finally returned to pre-pandemic levels,” the report said.
The most recent federal estimates show that these companies employed 203,700 workers in February. That compares with 202,800 in February 2020.
The report notes spikes in restaurant and bar employment in the summer. Employment last peaked at 218,100 in August 2023, which is still lower than the pre-pandemic peak of 219,200 in August 2019.
Report state, federal, and industry data used
The forum last assessed the state of the industry’s recovery in September 2021. It noted an overall recovery at the time, but the number of people working in restaurants and taverns in Wisconsin remained down about 9% compared to the period before the pandemic hit. struck in March 2020.
The latest report’s main data sources are the U.S. Bureau of Labor Statistics, the Wisconsin Department of Revenue and the National Restaurant Association.
“Interviews with Wisconsin restaurant and bar industry leaders also provided critical context,” the new report said.
Incomes are recovering, but lagging behind inflation
Wisconsin sales tax collections show that revenue generated by restaurants and bars statewide totaled more than $578 million in 2023 – up 17.3% from 2019.
However, this lagged behind the rate of inflation (19.2% for that period).
“Given inflation and higher food and by extension menu prices,” the report said, “this suggests that restaurants are earning a similar amount of revenue as they were before the pandemic, with what will likely be a lower number of transactions or smaller orders.
“Many restaurants also remain open on fewer days or shorter hours than before the pandemic, so they are likely generating more revenue for each hour they are open,” the report said.
Bars are hit harder than restaurants
The pandemic forced some Wisconsin restaurants and bars to close. But most survived, thanks in part to federal pandemic relief.
“However, during the pandemic, bars lost business at a faster rate than restaurants, and it is possible that their numbers remain low,” the report said. A lag in data on taverns prevents a more definitive conclusion.
A longer-term decline in the number of bars in Wisconsin, dating back two decades, “is driven by the loss of small, family-owned businesses,” the report said.
Also, “mid-priced sit-down restaurants, whose customers are more sensitive to price increases than those of fine-dining restaurants, and restaurants that serve lunch in the downtown core, where fewer people are working and dining out due to remote and hybrid work arrangements,” are more affected than others dining options.
Wage and menu price increases have slowed
Average annual wages for food preparation and serving workers increased 4.2% in 2023, matching the growth rate for all occupations. That compares with the 29.8% growth between 2019 and 2022.
“A key factor slowing wage growth is that the previously intense demand for restaurant workers has cooled somewhat,” the report said.
Meanwhile, menu price increases have slowed over the past year.
“According to an analysis by the National Restaurant Association, menu price increases for full-service restaurants were as high as 9.0% for several months in 2022, but had fallen to 3.2% as of March 2024,” the report said.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, X and Facebook.
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This article originally appeared in the Milwaukee Journal Sentinel: Wisconsin bars and restaurants continue post-COVID recovery, study says
