A popular, longtime restaurant in downtown Modesto is closing for good. Here’s why

Last week, Heather Elkins went to her cafe in the pitch dark of morning to hang one of the most personal messages she’s ever written on the newly butcher-paper-covered front door.

It read, in part, “After almost 30 years being in business, I have to make the difficult decision to close our doors to business permanently as of Oct. 19, 2022.”

The 45-year-old owner of downtown Modesto’s Deva Cafe has shuttered her business, which first opened under different owners at its J Street location in 1993. She cited the lingering effects of the pandemic, rampant inflation and the ever-tightening stress of being a small business owner.

“This wasn’t the outcome I was anticipating or wanting. But you can only do so much as one person, as the sole proprietor,” said Elkins, who has owned cafes — first in Manteca and now in Modesto — for 15 years. “When I put (the closed sign) on the door, I felt like people in Modesto will hate me for this decision. But I know I put my heart and soul into this.”

But even the hardest-working person’s best is little match for historically high inflation and the compounding effects of the pandemic, both on the economy and society at large. In the end, the weight of trying to pay rising bills, manage payroll, satisfy customer expectations and fulfill the spot’s original mission — a nice meal and good drink for breakfast or lunch — became too much.

Rise in inflation squeezes restaurant owners

Elkins said the last four to six months have been the most stressful she’s felt as a business owner. She has watched her food inventory bills skyrocket. In 2020, 15 dozen eggs cost her $28.96. Two weeks ago, 15 dozen eggs were $61.97. A gallon of Kraft mayo used to cost $8.98, now that same tub is $22.14.

She also knows that at the start of next year, a minimum wage hike is coming for her seven employees, who she already pays a little above the $14 currently required (that jumps to $15.50 in January). While large corporations are raking in record profit margins not seen since the 1950s, small business owners don’t have the same resources or recourse.

Her recourse for her rising costs was to raise prices on her menu. But, as any business owner knows, she said, “You can only raise prices so much, especially when everyone else in the world is feeling (inflation), too.”

Her burger went up by $1.50. Any dish with eggs in it, which is a lot for a spot known for its breakfast and brunch, went up $1. Still, keeping her balance sheet balanced just got harder and harder.

While downtown Modesto restaurants largely have been able to weather the worst of the pandemic — the closure of indoor dining, the pivot to takeout only, the reopening of indoor dining, the reclosure of indoor dining, and so on — this twilight period of the pandemic has given some owners a chance to reflect. And, like Elkins, I fear many of them will decide the struggle has become too real.

Fallout from COVID still reverberates for small business

She is not alone. Already, some 90,000 restaurants in America have shuttered during the pandemic, according to data from the industry advocacy group the National Restaurant Association. The layering impact of the pandemic and its fallout aren’t theoretical for Elkins. They’re every day.

“I don’t think people are grasping how much COVID affected restaurants and restaurant owners. I have been doing this a very long time, and I’ve seen the industry change,” Elkins said. “It’s sad, Deva could have been in business another 30 years.”

She said customer attitudes have changed, and the pandemic has shifted a lot of people’s habits toward third-party delivery apps and convenience buying. The arrival of the new Starbucks at J and Ninth streets also cut into her business, as customers choose to stay in their cars for coffee instead of walking into her shop.

The Modesto resident bought the cafe from longtime owner Lorena Loftis in July 2020, during the heart of the pandemic’s first year. She had made the deal to take over for Loftis, who had owned the restaurant for 17 years, before COVID-19 stopped the world in its tracks.

But she continued with the deal and completed the purchase, optimistic about owning a place where she had hung out in her 20s, when it become known as an arts and music staple downtown. More recently, though, she said the stress and struggle have become untenable.

‘I did my best and I hope it was good enough’

The cafe has been dark since Oct. 5, when Elkins began making arrangements for its permanent closure. She doesn’t plan to sell the business, just clean up and look for her next chapter. The process of going through a sale, she said, is too laborious and slow.

Next, Elkins plans to take two months off, and then look toward her next livelihood. She doesn’t know what it is yet, but it’s probably not in the restaurant industry. She put up the butcher paper so she wouldn’t feel on display inside her own shop as she finished up the final details. The letter on her door ended by encouraging her customers to visit other locally owned downtown establishments, which are no doubt feeling the same squeeze.

“People knock on the windows, they have a million questions, and I feel a little too emotional right now for that. Every day has just been so stressful,” she said. “My decision affects so many people, but I also am affected by this. I also lost my job and closed my business. But I’m proud of the job I’ve done for the last 15 years. I’ve met amazing people along the way. I did my best and I hope it was good enough.”