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.
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.
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.
"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.