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What the restaurant business looks like in the last year.

By
Real Estate Broker/Owner with Hamm Homes

It is no secret restaurants in Denver are struggling to keep up with rising product and labor costs. In the past three years, the number of licensed retail food, or restaurant, licenses issued in Denver has decreased by about 22%, according to the Department of Excise and Licenses in Denver.

Sorry we are closed sign board hanging on door of cafe Getty Images/iStockphoto

On the corner of East 20th Avenue and Logan Street in Denver sits Coperta, an Italian restaurant known for its rustic Southern Italian cuisine. The restaurant has kept its doors open for nine years, but it hasn't been easy.

"Every year, as the minimum wage rises, we have to make adjustments. We can't absorb a minimum wage increase without raising menu prices or finding other sources of revenue," said Aileen V. Reilly, co-owner of Coperta.

Since the pandemic, sales have been down 30% at Coperta. The restaurant has had to add a 23% service charge in lieu of gratuity to bridge the wage gap between front and back-of-house staff. It has also had to slim down its staff to stay afloat in the past few years.

"Everyone does a bit of everything in our restaurant. When we first opened, 12 people were working on a Friday night. Now, it's about seven," said Reilly.

struggling-restaurants-transfer-frame-101.jpg Coperta is on the corner of East 20th Avenue and Logan Street in Denver, an Italian restaurant known for its rustic Southern Italian cuisine.CBS

Sonia Riggs, president and CEO of the Colorado Restaurant Association, says Reilly is not alone in her struggle.

"For many years, the city and county of Denver consistently saw an increase in restaurants of about 3% to 5%. Now, we're seeing a net loss of restaurants in Denver. Out of the entire net loss of restaurants for the state last year, 82% of those were in Denver."

Riggs said that is a net loss of 183 establishments in one year, from June 2023 to June 2024.  She highlighted that increased costs for labor, utilities, rent, food, and supplies, coupled with reduced customer dining-out frequency are part of the issue.

Despite some restaurants adapting to efficiency post-COVID, many still struggle with profitability. Riggs emphasized the importance of government collaboration and creative solutions to support the 70% of Colorado's independently owned restaurants.

"One thing I think is important to note is that Denver's tipped wage is up 89% since 2019 and their full wage is up 64% since that same time, Denver's minimum wage and tipped wage are higher than that of New York City," she adds.

Riggs believes it is important to consider when restaurants are facing increased pressures on major business costs.

"There's only so much that a guest will pay before they stop going out to eat or decide to go someplace less expensive. So it's really squeezing those Denver restaurants, I think, much more significantly than you know, other industries," said Riggs.

Meanwhile, in LoHi, Cart-Driver, a pizza restaurant, has reopened after plumbing issues forced it to close for about a year.

As Chef Jabour prepared the dough for the pasta, Louie Betrus, the restaurant's manager, said rising labor and product costs have added stress, but maintaining quality and consistency is crucial for success.

struggling-restaurants-transfer-frame-156.jpg Chef Jabour prepared the dough for the pasta at Coperta.CBS

"The rise in wages, while hard to combat, is something we always want to be able to pay our employees, and it's in line with what we want to pay."

Denver's tip wage has risen 89% since 2019, making it tough for restaurants to remain profitable. Owners hope customers will continue to support their businesses.

"Keep going out and supporting us because we all want to be here," said Reilly.

Show All Comments Sort:
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

Hi Will,
It's a tough time to be in business, period. Businesses in every industry are being squeezed with higher prices from every direction. It's a vicious cycle. Instead of a "forced" gratuity, I'd rather a restaurant raise its prices and let me decide whether I want to go there and what tip the server deserves. I do not like being forced to give a set gratuity for marginal service.

Jan 25, 2025 07:58 AM
Kathy Streib

I'm with you Carol Williams 

Jan 25, 2025 01:57 PM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Carol and I have to agree with the way you are thinking.  I do not know how these breakfast places are staying in business.

Jan 25, 2025 09:21 AM
Roy Kelley
Retired - Gaithersburg, MD

It is sad to see the closings of so many restaurants. It is a challenging business and the habits of consumers have changed.

Jan 25, 2025 09:23 AM
Anna "Banana" Kruchten
Retired Broker/Owner - Phoenix, AZ
602-380-4886

Well a lot of this is caused by government that is not supporting small business or it's people, Some folks simply don't understand simple economics. I can't imagine having to pay such high prices for  everything and include sky high cost for waiter, cooks etc.  Let's hope we see costs come down A LOT this next few years.

Jan 25, 2025 10:23 AM
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

Automatically adding 23% to my check would make me not go there again.  Guess I won't be planning to visit Denver.

Jan 25, 2025 11:05 AM
Lew Corcoran
Better Living Real Estate, LLC - East Bridgewater, MA
Expert guidance. Exceptional results.

Thanks for shedding light on the tough challenges facing Denver's restaurants, Will Hamm! Your insights really highlight how vital community support is for these local gems to survive in such a tough climate.

Jan 25, 2025 12:19 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Will- we were talking about that over lunch with our friends today. Our favorite Tex-Mex place moved a block from their former building. I think they built their own. We noticed the prices increased and the portions were smaller. I didn't recognize any of the waitstaff either. 

Jan 25, 2025 01:59 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Will,

We notice many places in Austin can't make it with the rising costs of goods and then problems with finding affordable labor. I get it why prices keep going up and I still see some places that provide consistently good food and service very crowded. People will budget for a night out and cut back on other things to make it happen. They just can't do it as often as before.

Jan 25, 2025 05:58 PM
John Pusa
Glendale, CA

Hello Will Hamm it appears that a common problem. In my local area several restaurants close too.

Jan 25, 2025 06:22 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Will Hamm  sad but true post and just to be clear Los Angeles is struggling too, some of the reasons are minimum wage, taxes and inflationary cost of water, electricity, gas and food supply to name a few, Endre

Jan 25, 2025 09:57 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Jan 26, 2025 03:27 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I have heard that the restaurant business is tough, even without those other factors making it even tougher on owners.

Jan 26, 2025 04:20 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Will - you know better than I, the restaurant business even in the best of times can be fraught with many issues.  Like the world itself, dining out continues to evolve.  It is interesting to see how participants in industries change, adapt, adjust and yes, sometimes cease to be in existence.   It is also sad in so many ways.  

Jan 27, 2025 03:35 AM