PALO ALTO, CALIFORNIA – MARCH 30: Outdoor dining along University Avenue in downtown Palo Alto, California on Tuesday, March 30, 2021. (Nhat W. Meyer/Bay Area News Group)
Today, the mom-and-pop shops lining California and University avenues in Palo Alto look normal, but many businesses are still struggling to stay open nearly four years after COVID-19 hit the Bay Area. Businesses here are struggling with rising inflation and operating costs, and looking for new customers after regular customers disappear as employees continue to work from home.
That’s why the Palo Alto City Council last week identified economic recovery for small businesses along with climate change, housing and community health among its priorities for 2024.
It’s been a rollercoaster of sorts for owners Gillian Robinson and Don Lundell at ZombieRunner Coffee, a popular spot among workers around California Avenue.
Although business has not yet returned to pre-pandemic levels, the cafe’s sales are doing well, Robinson told this news organization.
With many customers working remotely and some companies closing entirely, ZombieRunner turned to selling its own beverages and whole bean coffee on its website to supplement the loss of revenue.
“Business is starting to pick up,” Robinson said.
Palo Alto Mayor Greer Stone, who began a one-year term last month, said helping businesses turn around is important to the city.
“Right now, we have a transition economy all over the world. We’re still trying to figure out where work from home and telecommuting are headed. Is it here to stay?” Stone said in a telephone interview. “A lot of our retailers and restaurants are hurting because office workers aren’t back anywhere near where they were before the pandemic, so it’s a transition we’re all facing — brick and mortar online.”
The permanent road closures, seen as a way to allow restaurants to operate outside at a time when indoor dining is restricted, have sparked heated debate among residents and business owners for months.
The City Council voted late last year to make ZombieRunner’s strip on California Avenue permanent.
While Robinson said he especially enjoys the pedestrian-friendly route at the weekly Sunday farmers market, he understands that the lack of vehicles may not be beneficial to all businesses.
But he hopes the city will do a better job of letting the public know that local businesses are open to the public.
According to the city’s business climate analysis published last August, while sales tax revenues will “largely return to pre-pandemic numbers” by the end of 2022, “sales tax returns alone are not necessarily indicative of recovery,” he said. and profitability’.
“Many small, local businesses, particularly restaurants, retailers and personal service providers, have been hit the hardest during the COVID-19 pandemic and have not returned to pre-pandemic cash flow and required profit margins,” city staff said in their report. “Inflation and rising costs of doing business, supply chain and manufacturing disruptions, rising interest rates, employment and labor shortages, increased online shopping and hybrid business preferences are all impacting small business operations and the overall recovery.”
According to the Jan. 29 City Council agenda, economic recovery projects to be completed this year include permanent parquet flooring, finalizing a study for new parking facilities on University Avenue, road improvement projects and other initiatives.
While some retail stores and services, such as barbers and beauty salons, lack of parking near their establishments deters customers from patronizing their stores, many restaurants and cafes do not mind the street closures.
“We love it,” said Rick Fleming, manager of Osteria Toscana on the corner of Ramona Street and Hamilton Avenue.
Osteria Toscana is located at the end of Ramona Street, which is still closed to traffic, near Palo Alto City Hall.
The much-loved Italian restaurant has been operating for nearly 38 years. Fleming said business is slowly recovering from the pandemic and hopes to improve this year.
More foot traffic on Ramona Street and food delivery programs have helped businesses weather the challenges of the pandemic and its aftermath.
“It’s hard to say what will happen. But I hope we can go back when the weather improves,” said Fleming.
But restaurants aren’t the only ones taking a hike after the pandemic.
Malina Lindt, co-owner of Peninsula Optical, said that while she and business partner Jeff San Diego could recover quickly in 2022, their sales were hit by the bankruptcy of Silicon Valley Bank last year as cautious customers limited discretion. spending.
“Right after that, we felt something,” he said. “It was disastrous.”
Even though the optical shop is not subject to the same physical constraints as lunch restaurants, Lindt’s experience is emblematic of the broader economic challenges facing many businesses in the region.
For Lindt, like many other local business owners, it’s been a tough journey to recover with the rising costs of running a small company, but he’s hoping this year will be better and will continue to operate in Palo Alto, he said.
“I think Palo Alto is one of those really dynamic cities where they’ve actually maintained their identity,” Lindt said. “I think once the stock market starts to pick up again, maybe we’ll see more people feel comfortable (spending) their money.”