Twin Cities independent coffee shops losing steam

In a normal year, Nokomis Beach Coffee would be entering its busy months when a weekend could bring 800 or 900 customers a day.

Now, the south Minneapolis coffee shop is in its first week of reopening after closing in mid-March and laying off 12 employees. "With some reservation," owner Dennis Kloek reopened the store Saturday with a new sheet of glass between him and customers, a new touchless credit card system and a limit of two to three customers at a time.

Some independent coffee shops have stuck it out during the stay-at-home order but are hurting. Jim Heider, owner of Royal Grounds Coffee Shop in south Minneapolis, said business is down 50 to 60%.

Many, though, like Nokomis Beach, simply shut down.

Rick Boraas — CEO of Roastery 7, which delivers roasted coffee beans to independent shops across the region, including Royal Grounds — estimates that only about 10 of the company's 165 customers have remained open during the pandemic.

"Nobody is making it financially," Boraas says.

Kloek said he shut down out of worry he might catch the COVID-19 virus and accidentally spread it to his son, who suffers from a rare lung disease.

During the three days he has been open, about a dozen customers have bought $100 gift cards, he said.

Kyrra Rankine dropped by Royal Grounds on Friday. The shop has been reconfigured for takeout only, and only three or four customers are allowed inside at a time.

As usual, owners Jim and Joanne Heider and their one employee, Julie Rathmann, were working behind the counter.

"I love these guys," said Rankine. "They are really lovely people, and they are committed to the community."

She bought an iced latte and banana chocolate chip muffin for herself and a small hot chocolate for her 9-year-old daughter, Zoey.

Key West Bistro owner Dan Milis, who operates the shop without any employees, said he's seen an "outpouring of support of my local customers."

Business is down 25%, but he is selling extra food, offering curbside pickup to those who phone ahead. Some people pull up, open the tailgates of their SUVs and wait as he puts their orders inside.

Nina's Cafe, at N. Western Avenue and Selby Avenue, in St. Paul was one of the coffee shops that closed. Owner June Berkowitz said her main concern was spreading the corona­virus.

"I know some of my customers and employees are immune-compromised and I didn't want them to get sick," she said. She said she is mulling whether to open for takeout service but wonders if it will be safe.

The shop is on the ground floor of Blair Arcade, a brownstone building that houses other businesses and condos. Berkowitz lives above the shop.

Perkelate coffee shop in St. Paul's skyway system is closed and unlikely to reopen, said Pamela Kobeska, who owns it with her husband, Armando Flores Ortiz.

The rent is $1,900 a month, she said, and they were just "scraping by" before the pandemic brought on the shutdown of many businesses. She doesn't see how the shop can survive even when nearby offices reopen.

Her husband is a cook, and Kobeska said she has landed a part-time job as a cashier at a grocery store.

Brandon Wallis, owner of School of the Wise Coffee Shop in Victoria, said he once had sales of $18,000 to $20,000 a week. Business is off by 80% now.

"We'd be better off just locking our doors, but we want to maintain the employees who are very valuable to us," he said.

"We are very reliant on the discretionary dollar that people have to spend," says Joanne Heider, who like her husband, wears a mask in the shop and takes other precautions. "A lot of people who come in are not working, but they are getting unemployment. But if that stops, what happens?"

Jim Heider said the couple has an application for small business assistance in the works.

Randy Furst • 612-201-5522