Faced with labor shortages and high cases of COVID-19, many Anchorage businesses still fear for their survival


Many small Alaskan businesses remain worried about their survival as the pandemic continues, although the business community as a whole is feeling better about the future, economic watchers say.

In Anchorage, several business owners say they still face a variety of issues, including labor and supply shortages, rising prices and dramatically reduced pandemic aid. Declining sales and conventions that were canceled in the latest wave of COVID-19, driven by the highly contagious delta variant, have made matters worse, they say.

Now that the summer rise in tourism has subsided, many businesses are “in survival mode” and are waiting for better days in 2022, said Jonathan White, owner of SteamDot Coffee Roasters.

“It’s really frustrating because we’ve come out of our first COVID challenges and everyone would agree we’ve had a hell of a good summer,” White said. “We had a hard time recruiting staff and then dealing with the onslaught of business that came back, which was great. But now the delta variant has brought us back to where we were at the peak of the pandemic. “

SteamDot sells vswholesale to over 80 stores and businesses, he said. Some companies have reduced their orders to reduce their expenses. Others are asking for more credit, reducing SteamDot’s cash flow, he said.

SteamDot cafes saw sales slow as COVID-19 cases increased, he said.

“I hope that as soon as the city becomes healthier again, everyone can think of healthier incomes,” he said.

Jon Bittner, of the Alaska Small Business Development Center, said the number of coronavirus cases that rose in August prompted many groups to cancel conventions in Anchorage and Fairbanks.

This has taken millions of dollars out of the economy, hurting the stores and restaurants that depend on this activity every fall, he said.

Alaska’s COVID-19 cases have started to stabilize after peaking in September, but the state’s case rates remain the highest in the United States, nearly five times the national average. Hospitalizations reached record levels last week.

An annual survey from the Business Development Center found that a significant number of companies remain concerned about their survival, Bittner said. The investigation will end in the next few days.

About 18% of the more than 400 people polled to date say they will likely close in the next six months without a change in the economy or without more financial support, Bittner said.

“The conferences have been canceled and people cannot stay open, and we cannot shop as we normally would,” he said. “And we’re seeing price increases and shipping delays. It all adds up.

[Supply shortages in Alaska continue, forcing retailers to stock up on goods and hope for the best]

The survey results are similar to last year, which answered a similar question, he said. The economy was in a worse state then, and more federal aid was available at the time.

“It’s a little more worrying this time around, because it’s coming to the end of most funding,” he said.

On the flip side, this year’s survey also found that businesses in Alaska feel more optimistic this year that the economy will improve over the next 12 months.

The answer to that question was overwhelmingly negative a year ago, he said.

“It’s not a huge difference, but it’s a change in perception,” he said. “I think it comes down to the recovery of the economy in general, but individual businesses are struggling to catch this wave of recovery.”

Companies say they are most concerned about finding workers, followed by cases and complications of COVID-19. The next concern was the difficulty in finding funding, he said.

Some people are still optimistic enough to start new businesses. But some companies and industries are more successful than others, said Ralph Townsend, professor of economics and director of the Institute for Social and Economic Research at the University of Alaska Anchorage.

Restaurateur Ezequiel Rodriguez said on Friday he was launching Alaskan Burger and Brew at the site that previously housed the Villa Nova restaurant, near the intersection of Arctic Boulevard and International Airport Road.

Sales were good at the Manhattan Restaurant and Lounge, which it opened this summer in South Anchorage. It is essentially a renowned version of the Bradley House restaurant, with mostly the same menu and staff, after the previous owner sold the restaurant.

“If you treat customers and employees well, keep quality food and everything is safe, we’ll stay busy,” he said.

Sandy Xayavongsy, owner of Alaska Bagel restaurant, said she was trying to keep her business alive after pandemic uncertainty forced her to shut down her bagel operation last week, eliminating the sole supplier of wholesale fresh bagels from Anchorage.

The pandemic has reduced its walk-in activity, especially among older customers. The latest increase in cases has brought more of this problem and others, including difficulty in finding enough workers, forcing her to cut her hours.

“It was just another slap in the face,” she said. “It was like, here we go again.”

With COVID-19 still an issue, she didn’t want to sign an expensive multi-year lease at the restaurant’s location in Midtown along Northern Lights Boulevard. The business is on the move, she said. Removing and relocating the giant bagel oven will be too expensive, so bagel production will end.

But Alaska Bagel will continue to make the burritos it sells to cafes, from shared commercial kitchens that rent by the hour or month, she said. With the disappearance of bagels, the name of the company will likely change next year.

“We are just trying to survive,” she said of the family farm. “We are still positive but nothing is certain at the moment.”

Bill Popp, chairman of Anchorage Economic Development Corp., said there are bright spots in Anchorage’s economy that are helping many businesses, including the booming air cargo at Ted Stevens International Airport d ‘Anchorage. It should go well this winter as the growls of international shipping continue.

[COVID-related cancellations of conferences and events pulled $39 million out of the Anchorage economy this year]

And as funding for pandemic relief dwindles, the state will soon distribute up to $ 90 million in grants to companies that recently applied, as part of a federal relief program, he said. -he declares.

Still, it will be a tough winter for many businesses, Popp said.

Engin Kilic is co-owner of the Alaska Ephesus Gift Shop and Convenience Store inside the downtown Hilton Anchorage hotel.

He said if tourism was bad next summer, it would be a “disaster scenario” for many businesses. He said activity had slowed in downtown Anchorage, with tourists leaving and conventions canceled.

To make it through the winter, he may have to dip into his savings.

“So I think we’re going to float (by) in the winter, use some of our savings and look to the summer,” he said.

Dan Hemme, co-owner of Creative Lighting and Sound, said business improves in the summer, thanks to events in the Palmer-Wasilla area. He provided sound production at the Alaska State Fair in August. It was a big deal, he said.

“But once we got the rise (in the cases), the events that I had pretty much canceled,” he said.

Profits are about a quarter of what they were before the pandemic, he said. He gets by selling sound and lighting equipment to churches and other groups.

With little debt, he can operate “neutral” until things improve, he said.

The American Cancer Society of Alaska recently hosted an event at the downtown Captain Cook Hotel. It was the first live nonprofit fundraiser he had worked for in a long time, he said.

He believes other events will emerge next year. “I hope this is just the start,” he said.

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