2 years after start of pandemic, Sonoma County economy nearing rebound but with some major changes

Over at Oliver’s Market at Stony Point Road, there are still a few reminders of how the store and its customers grappled with COVID-19 over the past two years.

More and more shoppers are no longer wearing masks, and recently employees were also given the no-mask option. You can get cheese samples if you ask for them, and the hot bar is stocked and open for lunch and dinner.

Consumers can now bring in their reusable bags, and not many are fastidiously wiping down their carts with disinfectant wipes as they did in spring 2020.

But it is still not quite back to normal at the west Santa Rosa store and the chain’s three other Sonoma County locations. The sample trays around produce sections and other aisles are still not back. And the Plexiglas at the register is still there.

“I spent two years being reactive,” said Steve Maass, founder and president of Oliver’s, which has carved out a niche as a go-to source for local food producers.

“I think (general manager Scott Gross’) and my job was basic COVID police,” he said. “That’s all we did. Now, we are starting to think about proactive things we can do.”

The company has about 1,000 employees, with most of them serving on the “front line” as essential workers who earned bonus pay during the pandemic.

As the omicron surge continues to drop, Maass said Oliver’s is focusing on the future and weighing growth opportunities. The team is considering a renovation of its Montecito Center location and perhaps adding another store.

Staffing shortages continue

The experiences at Oliver’s is repeating across Sonoma County. The economy is slowly rebounding as the pandemic’s full force has waned.

Some predict certain aspects of the local economy will resemble February 2020 before too long, but other areas have experienced systemic change — and won’t likely go back to pre-pandemic conditions.

One significant economic concern: A job market that is still limping and has yet to recover from employment losses.

Sonoma County is about 10,000 jobs below its employment level before the pandemic’s arrival. In January, approximately 245,200 were working in Sonoma County and the jobless rate stood at 4%, said Robert Eyler, a veteran local economist at Sonoma State University.

The effects have been especially felt in the hospitality industry, which has been chronically understaffed even as tourism appears to be returning to 2020 levels.

Construction and other fields have rebounded significantly, while wholesaling and manufacturing are near where they stood two years ago, Eyler said.

“The larger theme here is that leisure and hospitality and other personal services (category) tend to have lower- to middle-wage jobs,” Eyler said. “So, it’s our lower-income households that have continued to feel the brunt of the issue and kind of still under the shadow of COVID-19.”

The effects are being felt across the county.

For example, the Farmhouse Inn in Forestville is not offering all of its rooms for booking and is limiting its dining reservations because it still has 10 staff vacancies to fill, said Joe Bartolomei, co-owner of his family luxury inn.

“We are strictly deciding the amount we can do,” Bartolomei said in a quest to ensure service at the inn where rooms can go for more than $1,000 a night.

Such prudence has been more commonplace.

Restaurants especially still face major staffing issues, and many are not open as late as they had been pre-pandemic. That comes as 2022 appears to be a year when tourism may fully rebound to levels nearing months before the global health crisis.

For example, hotel occupancy levels at the end of 2021 were just slightly below those of 2019, according to the STR market research firm based in Hendersonville, Tennessee, that tracks such travel-related data.

In 2019, the local tourism industry accounted for $2.2 billion and more than 22,000 jobs, according to one study by Dean Runyan Associates, a Portland, Oregon, research firm.

“We are still having challenges in getting the workforce level we need to adequately serve what we believe will be a really robust summer,” said Claudia Vecchio, chief executive officer of Sonoma County Tourism, the local agency responsible for promoting local tourism marketing efforts. She added that she was cautiously optimistic about the travel season for 2022, but variables such as inflation and rising gas prices could change things.

County real estate continues to boom

While many businesses are racing to return to normal, some changes appear to be irreversible.

Many local workers continue to do their jobs from home, leveraging such apps as Zoom and Slack. The video conference capabilities are making it easier to be connected digitally, whether full-time or in a hybrid home-office role.

Some fear that workplace trend may squeeze bottom lines for stores and restaurants across Sonoma County that depend on foot traffic from those daytime workers who grab lunch or do after-work shopping.

The real estate market also has been affected with more remote workers relocating to Sonoma County, such as affluent tech workers from San Francisco or Silicon Valley who can more easily afford homes. That trend, coupled with a low inventory of homes, has exacerbated the affordable housing crisis.

State officials earlier this year said California wants Sonoma County and local cities to approve permitting of more than 14,500 new homes by 2031 because of the low inventory, which has triggered soaring purchase prices.

The median sales price for single-family homes in the county hit $789,000 in January, a nearly 20% jump from the same month in 2019, before the pandemic took hold.

The area already has a workforce housing problem because only about half of the roughly 6,000 homes lost to wildfires over the past five years have been rebuilt.

“The pandemic has made our housing affordability situation … an even more dire situation,” said Ethan Brown, interim executive director for the Sonoma County Economic Development Board.

Seeing the positives in pivoting

During the pandemic, local firms pivoted and found new ways of generating revenue and conducting business. The local wine industry experienced some major shifts, especially as tasting rooms were closed for months and restaurant dining sales have not fully recovered.

In response, online sales became much more prominent for North Coast wine companies. Jackson Family Wines of Santa Rosa introduced yourwinestore.com so customers could have a one-stop portal to buy bottles from all of its various wineries. CEO Rick Tigner said late last year the online sales represent about 1% of overall sales but almost 25% of the profit.

When tasting rooms reopened, they accepted guests on a reservation model to better space visitors and comply with county health protocols. Those preplanned bookings are now more the rule rather than the exception for many wineries.

Vintners benefit by being able to adjust their staffing to specific needs, and the customer is rewarded with a more personal experience, said Michael Haney, executive director of the Sonoma County Vintners, the main trade group for the local wine industry.

“The appointments really help them curate a really fantastic experience for the consumer as well as a system in the scheduling of staff,” Haney said. “Being able to engage that consumer is critical nowadays, especially with wholesale consolidation.”

Staff Writer Ethan Varian contributed to this story. You can reach Staff Writer Bill Swindell at 707-521-5233 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.