March 2, 2024


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Austin Small Business Owners Pessimistic On Coronavirus Recovery

6 min read

AUSTIN, TX — Austin has the nation’s largest share of small business owners who think they won’t be able to recover from the corrosive economic effects of the coronavirus, according to a study released on Wednesday.

Researchers at LendingTree, the nation’s largest online lending marketplace, analyzed results from the U.S. Bureau of the Census Small Business Pulse Survey before calculating the percentage of small business owners in the 50 largest U.S. metros who believe economic recovery is beyond their reach.

Among the key findings:

  • Neighboring San Antonio ranked second, with 14.9 percent of respondents not believing their business will recover from the pandemic. Moreover, more than 62 percent of San Antonio small business owners believe it will take at least four months before business is back to normal.

  • At the other end of the spectrum, small business owners in some cities do see light at the end of the tunnel — even if it may be further away. In Raleigh, North Carolina; Salt Lake City; and Sacramento, California, greater than 95 percent of small business owners think things will return to normal at some point if they haven’t already.

For more details, read the COVID-19: Where Small Business Owners Don’t Believe They’ll Recover full report.

Austin small business owners can point to evidence on which to base their pessimism. New data from Yelp shows nearly 1,500 Austin-area businesses have closed — either temporarily or permanently — during the coronavirus pandemic. The Yelp study examined closures that occurred between March 1 and July 10, finding that 1,499 businesses in the Austin-Round Rock metro area were closed at some point during that time span.

Of those closures, 155 were restaurants now closed permanently as the study showed. Another 72 retail businesses closed permanently as well, according to the findings. The restaurant industry has been the hardest hit followed by the retail sector. Bar owners also have been heavily impacted amid a second gubernatorial order to remain closed until a flattening of the illness curve.

In the Yelp study, Austin-Round Rock ranked 14th among the nation’s metro area with the highest closure rate per 1,000 businesses. Read more grim details at the Yelp Economic Average report here.

There’s valid reason for concern among small business owners, with a growing list of corporate casualties — some of them iconic venues — littering the local landscape. Among the recent closures:

  • The music venue and bar Barracuda, 611 E. 7th St. in the Red River Cultural District, announced its permanent closure on June 10, it will permanently close. “The time has come for Barracuda Club to bid adieu,” its owners wrote on social media. “From the incredible artists to our amazing staff, we thank you for making us part of your lives for the last five years.”

  • The owners of Blue Dahlia Bistro on May 1 alerted to the closure of its East Austin location after 13 years while noting its two other sites in San Marcos and West Lake Hills would remain open. “With the heaviest of hearts, we regret to announce our original East Side location will not be reopening,” officials wrote on Facebook. “Thank you, Austin, for the 13 years of happy hours, brunches, and all the great memories. It was an honored to be part of this East Side community.”

  • The restaurant Botticelli’s on South Congress Avenue closed permanently on July 26. “We don’t have the words currently to tell you how much this community has meant to us,” the owners wrote on social media. “We are so grateful to everyone who has ever walked through our doors.”

  • Operators of the North Austin Gay bar BT2 alerted of its demise on social media after an unsuccessful GoFundMe campaign to keep it running. “We are saddened to have to permanently close our doors. A proper love letter to all our customers (bt2 family) will come…in the meantime, contribute if you can. If you can’t we understand the hardships many of you may have and if you already contributed, your generosity is deeply appreciated.”

  • Buzz Mill Coffee in Govalle closed its newest location at East 7th Street and Shady Lane, according to reports. The owner said a second location on Riverside Drive would remain open.

  • On June 17, owners of Cafe 290 announced their closure. “Unfortunately we will be closing our doors Father’s Day June 21st,” officials wrote on Facebook. “Please come by and support your cooks and waitresses this last week. Don’t be afraid to tip the cooks, they won’t bite unless you want them to. We will have a final closing party Wednesday, June 24th. This will be a private event open to all our close friends, family and vendors that supported us these past 5 years. Please give your name and email address to Skeeter Simpson if you’d like to attend.”

  • Operators of the Dart Bowl also announced permanent closure after 62 years in business on July 14, shuttering three days later. “This is a terrible loss for our family and for Austin, but a pandemic that keeps people home is also keeping them away from local entertainment options,” co-owner John Donovan wrote in a prepared statement. “This is the toughest thing we’ve ever had to do as business owners, but it was our only option.”

  • The owners of Daruma Ramen announced June 17 they would close permanently. “We want to thank the community for the undying support of our chicken broth ramen throughout the last 7 years,” co-owner Kayo Asazu told CultureMap. “Sadly, it has come time for us to move on to greener pastures. Due to COVID-19, Daruma Ramen will not be opening back up. This was a very tough decision to make, but we know it’s the right one.”

  • Similarly, owners of El Interior shuttered after 40 years of business in the Clarksville neighborhood on June 15. Owner Marcia Lucas has staged a liquidation sale prior to the closure to sell her stock of handmade textiles, furniture accent pieces and women’s apparel by Aug. 8.

  • Lovers of Mexican food got the unkindest cut of all when the popular Enchiladas y Mas closed its doors forever on April 19, as owners wrote on Facebook. The restaurant’s operators were hit especially hard from coronavirus with the death of a family member from the virus, prompting the decision not to renew the lease. “Before his death, we already knew that when our lease ended, June 2020, we would have no intention of signing a new lease,” officials wrote on social media. “This decision has been in the works for over a year and has nothing to do with our landlord, he’s been fair to us all these years. This was our decision.”

  • The popular West Campus eatery Fricano’s Deli closed in late April. “We are deeply saddened to announce, despite every effort to make it work, that we will have to close our doors permanently,” owners wrote on Facebook.

  • The South Austin restaurant Full English closed permanently on July 19. “We have fought hard and struggled on through the lockdown and restrictions, but it recently became clear that we could not afford to continue,” the restaurant posted on Facebook.

  • Lucy’s Fried Chicken on Lake Travis is no more after its owners announced a May 14 closure. Locations at South Congress, Burnet Road and Cedar Park remain open at limited occupancy.

  • Magnolia Cafe owners opted to close the Lake Austin location amid economic hardship on April 17. The flagship location on South Congress remains open to a fashion, offering takeout.

  • The North by Northwest pub closed after 20 years in business.

  • After nearly 30 years in business, Shady Grove closed its doors at 1624 Barton Springs Rd. The venue was reported to have been the host to the city’s longest-running free live music series dubbed Unplugged at the Grove.

  • Sky Cinemas operators in Dripping Springs also announced its permanent closure. “We had eagerly looked forward to the day when we could safely re-open Sky Cinemas,” officials wrote in part. “Sadly, that day will not come. With our business closed due to COVID and no revenue coming in, we were unable to pay our rent. We attempted to reach an arrangement with our landlord that would allow us to stay, but we failed to do so, and our lease was terminated.”

  • Retailer Teacher Heaven at 8650 Spicewood Springs Rd. is yet another coronavirus casualty, closing its doors after 24 years providing classroom supplies to teachers and students.

  • Iconic music venue Threadgill’s was among the most prominent venues closing due to the pandemic. The original North Lamar location — which played host to such legendary acts as Janis Joplin and ZZ Top — closed, while the second location on Riverside Drive remained open.

As coronavirus cases continue to surge, LendingTree researchers noted, small business owners are becoming increasingly pessimistic. Across the U.S., the rate of small business owners saying their businesses won’t return to normal is up more than 50 percent, according to the findings.

This article originally appeared on the Austin Patch

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