January survey data from the Federal Reserve Bank of Dallas revealed 70% of Texas business owners were negatively impacted by the COVID-19 surge in the past month. Leslie Martone, president of the Cy-Fair Houston Chamber of Commerce, said the pandemic has directly influenced the way small businesses in the Cy-Fair area operate.
“And so it was one of those things that people just had to adjust [to],” Martone said. “I think we had a few phone calls and a few emails of, ‘Am I doing the right thing by letting my employee stay at home?’ and ‘We have individual offices; what do you think about us coming back to the office?’ And I said, ... ‘If you’re a mom and pop, it’s your own thing.’”
Houston’s economy has recovered and rebounded from shutdowns, oftentimes resulting in more demand than there is supply, said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership.
“We shut everything down in March and April of 2020, and we realized we didn’t need to shut it down,” Jankowski said. “So things started opening back up, and that’s when we saw the first surges in growth. The last quarter of 2021 was just incredibly strong. It was the strongest quarter on record for job growth.”
With businesses fully operational, they need as many hands as they can get, meaning less flexibility in scheduling than there was a year ago, Jankowski said. Costs for goods and supplies are higher for these mom and pop shops as well, making it more difficult to raise wages and leaving a gap in production as more people go out to shops or eat at short-staffed restaurants.
A January inflation update from the GHP reported a 7.5% rise in consumer prices nationwide since the start of 2021. The GHP also reported a 5.1% increase in job creation in 2021 with 151,800 positions created.
This influx of job opportunities has left businesses competing for workers. Many employees are using this opportunity to change careers or move from one industry giant to another, Martone said. When faced with these hardships, local Cy-Fair businesses have adapted and persevered.
Ongoing challenges
Many of the issues businesses are facing are related to the supply chain—the flow of goods from the producer to the customer—which was essentially halted when the pandemic first hit and nations ceased trading and shipping, Jankowski said. Although many ports have opened back up, variant outbreaks still pose a threat to this system, leaving business owners wondering when they will get their next shipments in.
One such local business is Giannina’s Pizza and Catering, which struggled to find food supplies and paper goods.
“We’ve had to make do by finding other sources,” Giannina’s owner Giovanna Cicciarella said. “I actually ordered on Amazon for plasticware. So we’d go to Restaurant Depot, or we would [try to] get it from our distributor, and I had to get it on Amazon.”
Lisa Lau, co-owner of L3 Craft Coffee in Cy-Fair, said the coffee shop has had to stock up on certain items to avoid stress later on.
“We’ve actually stocked quite a bit of our safety stock. ... Even at home, my office that is usually empty is now full of boxes,” Lau said. “So it’s only because the wait times are a lot longer. An example is that we placed an order to have the things custom made, and they didn’t get in until like August. And we usually get them in one month, but we took into account the processing time, so we ordered a month ahead.”
Jankowski said other businesses have turned to Walmart or Target to stock their coolers with sodas and their shelves with cups as their usual providers limit distribution.
Alongside supply chain disruptions are staffing shortages. Local business leaders agree people have come to expect higher pay for what are coined “behind-the-counter” jobs. Jankowski said he believes this is due in part to people becoming accustomed to working from home or having more flexibility during the peak of the pandemic. The GHP reported there are around 92,000 fewer workers in the Houston region now than there were a year ago.
Quarantining and its impact on the workplace is also still evident as many corporate businesses still offer telecommuting options and more flexible schedules, Martone said.
While this is the case in the corporate world, many small businesses and restaurants require their employees to be physically present and ready to serve their customers.
According to Martone, many of these front-line employees found themselves unemployed when the pandemic first hit and are now wary to enter a position that can be deemed nonessential should another contagious variant present itself.
For example, when the delta variant spread in 2021, some businesses began to temporarily close or limit occupancy again to limit transmission between employees and customers, Martone said. This compounded previous issues in the supply chain as some ports shut down and others remained open.
Martone said she has been impressed by business owners’ ability to adapt with the times.
“I feel like we’re starting to come out and see a few things, but we haven’t seen a whole lot of people say, ‘I have to close my business’ or ‘I’m done,’” she said. “We’ve heard a lot about businesses pivoting or doing different things, selling different things or making different things.”
Businesses adapting
Curbside, takeout and delivery services became staples of the food service industry when the pandemic began. L3 Craft Coffee started its own curbside service during the pandemic since it lacks a drive-thru. Co-owner Tommy Lau said curbside allowed customers to get their morning coffee without potentially exposing themselves to others.
Restaurants also turned to third-party apps such as DoorDash, UberEats and GrubHub to get their goods to their customers in a safe way. While practical, this method can also be costly due to fees charged to the business, Martone said.
“I would say, to this point, the DoorDash and all of those—I would think they probably did really, really well,” she said. “Locally, as far as I know, our restaurants hurt, but I know specifically in Cypress, in the heat of the pandemic, we helped a lot of our restaurants by [referring the Hospital Foundation to local restaurants to feed hospital employees].”
At family-owned and -operated Giannina’s, staff have leaned on each other for support to persevere through these challenges.
“We have been a team of four for 40 years. Whether we have staff or not, we make it because we each fill in the gaps,” Cicciarella said. “So that’s another thing that because we’re a family unit we’ve survived.”
Cicciarella said the community support also contributed to the restaurant’s success; when it was unable to seat customers in the restaurant, staff used their catering tent to set up outdoor seating. Curbside delivery and takeout were also implemented and continue to be popular.
“[Catering] did go down, but it did help with keeping the place open—a combination of curbside ... and the catering, you know, we were able to stay in business,” Cicciarella said. “So now the business is 50% dine-in and 50% takeout.”
Looking ahead
While staffing shortages and access to supply lines are unfavorable, they are parts of the growing pains the economy is facing as it bounces back. Jankowski said he believes the economy has made an outstanding recovery. The GHP reported about 316,700 of the region’s 361,400 jobs lost have been recovered as of the end of 2021.
“No one thought the economy would rebound as strong as it has,” Jankowski. “A year and a half ago, when we talked about the recovery, people talked about it looking like a hockey stick, sharp drop and a slow, gradual increase; it looks like it’s been more like a check mark.”
All the while, businesses are facing higher operating costs and are starting to have to divert some of that burden on the customers. This can be seen in price increases of certain items or limits on menu options as the availability of certain goods varies. According to the Bureau of Labor Statistics, the cost of meats, poultry, fish and eggs increased 12.2% from January 2021 to January 2022.
Moving forward, Jankowski predicted the community will not see the same exponential growth seen in 2021, and businesses such as L3 and Giannina’s will continue to employ their pandemic changes for the sake of their customers and employees.
“They’re simply going to go and do what it takes to keep the doors open,” Jankowski said. “So the small business by nature tends to be what the small business lacks in financial wealth with all the makeup for nimbleness.”
