Even with decades of experience, COVID and recession impact local business in new ways

When the pandemic hit, businesses of all types were forced to close their doors and adjust their sales. Even though the effects of COVID aren’t as prominent now, the recent spikes in inflation have made an impact on some of the longest-running businesses in the area.

Curtis Shulman, who was the director of operations for Hotel State College for eight years until November, said the inflation “crisis” is largely affecting the food and beverage industry.

Hotel State College was built in 1857 in the heart of downtown State College, and since then, the brand has expanded to include restaurants and bars such as The Corner Room, Bill Pickle’s Tap Room, Zeno’s Pub and the Allen Street Grill.

“Before the pandemic, we put in an order, and everything would just come in,” Shulman said. “Now we have to put in an order and hope everything comes in.”

Local restaurants have struggled to keep up with rising food costs and staffing changes, while other longtime businesses are facing challenges like never before, with one downtown State College store owner saying he’s contemplating closure due to dwindling sales.

Restaurants burdened by rising costs, staffing shortages

Shulman said inflation has impacted the price of food, but he’s especially seen the effects of inflation on alcohol, with scotch and imported fine wines and spirits “going up by 10, 15, 20% in some cases.”

“We have to adjust that to make sure that ... there’s something in the bank at the end of the day,” Shulman said.

The rise in prices and availability of goods caused some menu changes, according to Shulman, but one of the biggest challenges is staffing shortages in the back of the house.

He said he’s seen a trend of people straying away from the culinary profession, and Tracey Moriarty, owner of Duffy’s Tavern in Boalsburg, said she’s noticed a similar trend.

“Maintaining a front-of-the-house staff is not difficult,” Moriarty said. “But the kitchen staff is extremely difficult. ... Some of the challenges have been the culinary programs in the high schools; (it was) very difficult to work with them through COVID face to face, so those classes were canceled.”

Shulman said more students are choosing the higher education route, so there are fewer people applying for culinary jobs, and Moriarty said the “creativeness” and “desire” to work in the kitchen has diminished over time.

Moriarty’s Boalsburg business was built in 1819, and in her 11 years of owning the tavern, she said the pandemic has presented the most challenges, especially staffing shortages and trying to keep up with a fair payroll.

“I really feel like I’m completely starting all over again, trying to get a feel for what’s happening in the area and trying to see what’s going on, where we have to be, and what we have to do,” Moriarty said.

Centre County’s unique position

Greg Scott, the president and CEO of the Chamber of Business and Industry of Centre County, said the recession is affecting all types of companies because the workforce just isn’t there.

Between the pandemic and foreign relations like Russia’s war in Ukraine, Scott said in the past year that he’s held his position, he’s seen several challenges with inflation.

However, Scott said, in some ways, Centre County is unique because “80% of (the) industry is in education, health care and government.”

The stability of those industries, largely due to the fact that Centre County is home to Penn State, has helped the area stay “poised and positioned well,” Scott said.

While the specific COVID relief funds granted during the pandemic are no longer being distributed, Scott said the CBICC will continue providing resources and counsel to businesses in the area.

However, the biggest challenge Scott said the chamber is still trying to figure out is the spike in housing prices in recent years.

In the past year, the value of State College homes has risen by 6.5% to average $364,932, according to Zillow data.

Scott said “transportation becomes a big factor for employees” because it’s not easy to relocate to the area and pay the price of living here.

While Shulman said Penn State brings in student employees during the school year, he said long-term staff members are harder to find because there’s a large difference between entry level pay and the price of living in State College.

“You have all this amazing talent being cultivated across College Avenue, but then we can’t retain that employee and that student,” he said. “I think there’s a gap there that needs to be closed.”

Changing customer habits

Douglas Albert owns two businesses in downtown State College, and he said Uncle Eli’s Artist Marketplace and Frame Shop has seen a shift in the amount of people coming through the door.

Albert, who opened his art supplies store in 1970, said the problem isn’t inflation — the problem is the shift to online shopping, which the pandemic also didn’t help.

“People always beat (and) pound their breasts and say, ‘Shop local,’ but most of that stops at the farmers market,” Albert said. “... People want to get fresh food local, but it’s a whole different world with soft goods.”

With the way business has decreased over the past few years, Albert said he may have to close his shop unless he can somehow increase sales.

Albert’s other business, the Douglas Albert Gallery, holds pieces of fine art from artists all over the world, and while that business is strong, he has noticed that fewer people appreciate the value of the art inside his shop.

“Ten years ago, it was a lot easier to sell an expensive painting,” Albert said. “It seems that now people aren’t pulling the trigger.”

On the other hand, Charles Kranich, who’s a fourth-generation owner of his family business Kranich’s Jewelers in State College, said the current economy has made his customers more value-conscious.

“I think that’s actually served us well because pricing can be pretty competitive,” Kranich said. “I think that’s actually pretty good for us.”

Kranich’s Altoona location opened in 1923, and the free-standing store on North Atherton Street opened in 2012, but in between, the business moved in and out of malls with the rise and fall of mall popularity.

Staffing issues didn’t affect Kranich’s business as much as others in the area because of his long-term employees, and Bellefonte business owner David Letterman said the same.

Letterman has owned his family restaurant Bonfatto’s Italian Market and Corner Cafe for 24 years, and the business is celebrating its 103rd year in 2023.

With the tight-knit staff and family succession, Letterman said his employees stuck around during the pandemic, and they were fortunate enough to provide takeout service.

“The cost of doing business is just probably the highest I’ve ever seen,” Letterman said. “While you may seem you’re busy ... it’s very, very difficult to make a profit because just we can’t charge what we need to charge, so we just have to watch everything like everybody else does with their own family.”

Letterman said it wasn’t an easy decision to raise some prices in December, but he’s thankful for the people who shop locally because he said Bellefonte is a “town on the rise.”

“Being a small family-run business, it allows us to be nimble. So as we see things change, we can adapt pretty quickly,” Letterman said. “... I don’t see anything pressing at the moment other than trying to get through winter … and see the town just really blossom.”

This story was originally published February 26, 2023 at 5:00 AM.