NJ businesses beleaguered by COVID are finding a new appetite for digital behaviors

0

Marcello Chi recalls the day in March 2020 when the United States went into lockdown. Not only was he terrified of a mysterious virus, but he also feared losing his Korean-inspired restaurant in Cliffside Park.

“The first wave of the pandemic, the first few weeks, it was bad, but then people got tired of eating at home and the takeout orders started coming in a lot more,” Chi said.

Chi’s restaurant, Wich-One, survived on take-out orders and a COVID-19 forgivable loan from the Small Business Administration (SBA) COVID-19 Economic Injury Disaster (EIDL). He used the money to pay off other loans he had taken out to get through the early days of the pandemic. However, Chi says the money was not enough to generate a profit.

“I was going out of pocket to pay rent and payroll,” Chi added. “I literally had to get rid of people because I couldn’t afford to pay them, and although minimum wage was around $12, people came in for interviews wanting $15. They knew I was attached and they could make any request they wanted.

But the innovative restaurateur pushed on, determined to keep his beloved restaurant open. Over time, however, Chi says he found himself paying up to 30% of his sales to delivery apps.

“I tried to get rid of the apps, but people – if you’re not on them – they won’t order you,” Chi pointed out. “I tried to get rid of it but the sales dropped. Then I said, ‘there’s no point in fighting them, just join them.’

Despite that, Chi says every day felt like an uphill battle. So, in early May, Chi made the heartbreaking decision to close her restaurant. He took to Instagram to announce that Wich-One would be closing after May 31.

“Keep following,” Chi wrote on Instagram, “Maybe something exciting will rise from the dust in the future.”

For Chi, the apps or the pandemic weren’t the straw that broke the camel’s back. The culprit, he says: Prices are rising on almost everything, from meat to takeout containers. The restaurant owner says he had no choice but to charge more for his food. Before the pandemic, foodies couldn’t get enough of her Instagram-worthy sandwiches and bowls. But since they were struggling financially themselves, many were unwilling to pay the extra money.

“Orders have gone down a lot, and if I had to charge the original price, I would donate food,” Chi pointed out. “My ribeye went from $5.75 a pound to $9 a pound, and now it’s down to $7. Supplies, everything, containers, little brown bags, everything went up.

The Bureau of Labor Statistics reports that the Consumer Price Index (CPI), which is used to measure inflation, rose 0.8% in February, up 7.9% over the past twelve month. The rate is as high as it has been in 40 years.

Chi no longer wants government loans. That’s why he accepted an offer to manage and be a partner in a grocery store in Battery City. There won’t be a kitchen there for Chi to whip up her twist on a Philadelphia Cheesesteak or whip up her version of a Bibimbap. But he will have peace of mind. Rent will not be due next month. He believes that if he works hard, he will be able to pay off his loans and one day bring back a version of his restaurant.

Chi’s story is not unique. There are thousands of businesses across New Jersey and the country on the brink of collapse.

Fern

“The bottom line for all of these businesses is that they need money to fix all of these issues that are causing distress,” said Thomas Bracken, president and CEO of the New Jersey Chamber of Commerce.

Ultimately, businesses from gyms to restaurants are struggling not because of mismanagement, but because of a global pandemic that has killed nearly a million people in the United States alone.

The SBA has offered businesses repayable loans through its Paycheck Protection and EIDL programs. So far, the SBA has paid out nearly $26 billion, but $48 billion continues to sit in the fund pending processing of applications received. Since restaurants typically operate on a very low margin, waiting for funding could mean the difference between staying open or closing.

On Tuesday, U.S. Senate Small Business and Entrepreneurship Committee Chairman Ben Cardin and U.S. Senate Appropriations Subcommittee on Financial Services and General Government Chairman Chris Van Hollen (both Democrats of Maryland ), urged the SBA to process the pending applications.

“We are writing to express our disappointment with the Small Business Administration’s (SBA) decision to close the COVID EIDL program prior to the May 6 deadline,” reads Van Hollen and Cardin’s letter to the administrator. American of the SBA, Isabella Casillas Guzman. “By closing the program prematurely, the agency appears to have prioritized its own administrative needs over those of thousands of borrowers awaiting decisions on their applications.”

We were unable to get a comment from the SBA. On Tuesday, the SBA announced that Guzman had been diagnosed with COVID and was working from home while dealing with mild symptoms.

U.S. Representative Tom Malinowski spent Tuesday criss-crossing Union County, visiting small

Malinowski

businesses. One of his stops, Westfield, where many storefronts remain vacant. Major clothing chains like Ann Taylor and Francesca’s have closed their stores in town. Lord & Taylor has also closed its physical department store in Westfield, after bringing its iconic brand online. Some small mom and pop stores have also closed. Malinowski promises residents he will fight for them, especially as they face more problems due to supply chain issues.

“New Jersey’s small businesses support most of the jobs in our state, so helping them weather challenges like the COVID shutdowns and Tropical Storm Ida has been critical to our economy,” Malinowski said. “I will continue to work in Congress to make sure they get the support they need to thrive.”

Democratic Congressman Malinowski also visited businesses in Phillipsburg, including MAC Pizza & Wings, where Malinowski says owners told him they were feeling the brunt of inflation but their jobs had improved since COVID .

Democratic Gov. Phil Murphy has also promised to help businesses.

Governor Murphy believes that small businesses are the backbone of our state,” said Alyana Alfaro Post, the Governor’s press secretary. “Since the onset of COVID-19 (pandemic), the state has distributed over $850 million in funding to help small businesses as our state continues to recover economically from the effects of the pandemic.

Murphy

“The Governor’s proposed budget for fiscal year 2023 includes $50 million in new funding for small businesses and supports many other programs that help businesses directly and indirectly. The Governor is open to other options to help small business owners and workers.

Bracken of the New Jersey Chamber of Commerce says the Murphy administration has taken steps to help businesses, but the $850 million that has been provided so far just isn’t enough to meet the needs. in capital from the business world. He says the governor can tap into the US bailout to provide emergency relief to businesses. The plan was passed in 2021 to help the American people, including providing child tax credits to families and payroll assistance.

“The business community is the backbone of the economy and is the source of the jobs that need to be created to help people,” Bracken said. “If you don’t have a healthy economy, you’ll have a weak economy to fund these programs (social programs). What we are saying is that if you help the business community, you will create jobs. You will create income to help social programs.

Bracken is also concerned that the Murphy administration is asking the business community to replenish the state’s bankrupt unemployment trust fund over the next three years.

“We’re asking the US bailout to replenish the unemployment trust fund so the business community doesn’t have to pay taxes,” Bracken added.

We’ve reached out to the Murphy administration to find out how US bailout money can be used to help businesses. We were told to contact the Economic Development Authority for information on important resources the state has in place to help small businesses. We contacted the NJEDA but no one answered us.

bunning

In the meantime, national digital expert Jordan Buning, who leads ddm marketing + communications, says businesses, including restaurants, need to treat their physical and digital experiences as unique parts of the same customer service experience. It encourages business owners to promote their brands and services on their websites and social media platforms.

“The game is about getting in front of consumers, building a reputation and cultivating relationships,” Buning emphasized. “Restaurants will need to be proactive in reaching customers rather than expecting to be found.

“New restaurant business models need multiple revenue streams. Restaurants need to rethink how to have these different types of service models and customer experiences in a single restaurant, from online presence, order management to floor plans. Numerical control is an example. Online ordering platforms have seen demand for their services increase (by) tenfold since the start of the pandemic. While there might be a drop since indoor dining returned, a good mix of all restaurant orders will still be from offsite customers.

Buning says customers will continue to leverage the digital behaviors they’ve forged during the pandemic and businesses need to embrace this new world. He says chatbots, a computer program designed to interact with customers over the Internet, may be an option for some businesses.

“Be digital first, even in-store,” he says. “Beyond a website and app, invest in digital customer-facing tools that improve the customer experience in-store and when they can’t be in-store. These platforms (allow you) to live stream events hosted by store associates and take orders in real time through websites or apps.

For now, however, business owners like Chi are focused on navigating the immediate choppy waters the pandemic has pushed their way.

“At first I was sad,” Chi said. “At first it was like a dream that faded, but I have a very strong belief that everything happens for a reason. I believe in God’s plan. Right now I’m relieved only because it eliminates many of the worries of everyday life.

(Visited 96 times, 98 visits today)

Share.

About Author

Comments are closed.