A new survey from the National Restaurant Association shows the fragility of the restaurant industry’s recovery. Many restaurant operators now believe that the recovery will run into 2022. Forty-four percent of operators believe that it will be more than a year before normal business conditions resume, and 19% believe that there will never be a return to normal business conditions.
In a letter to Congress, the National Restaurant Association urged representatives and senators to replenish the Restaurant Revitalization Fund (RRF). It also discouraged certain provisions of the Build Back Better Act that could impede progress for restaurants.
A total of 78% of operators report having experienced a slowdown in demand for indoor dining in recent weeks due to the COVID-19 Delta variant. Also, 63% of restaurant operators say that August, which is usually one of the busiest months for restaurants, was lower than in August of 2019.
Restaurants are facing higher costs, too. A total of 91% of operators are paying more for food; 84% are facing higher labor costs; and 63% are paying higher occupancy costs. Profitability, however, is down: 85% of operators report smaller margins than before the pandemic. A total of 95% of restaurant operators say their restaurant experienced supply delays or shortages of key food or beverage items during the past three months.
Meanwhile, 78% of operators say that their restaurant doesn’t have enough employees to meet current customer demand, despite the fact that the industry has added back a good chunk of the jobs lost during the pandemic.
Full-service restaurants (FSRs) are facing a tough time with operating short-staffed. A total of 71% of operators reported not having enough employees to adequately staff the restaurant as a reason they may not be operating at the maximum capacity allowed in their jurisdiction. This breaks out as 81% of FSRs and 61% of limited-service restaurant (LSR) operators.
When it comes to actual staffing levels, LSRs are more understaffed than full-service restaurants: 37% of FSR operators reported being more than 20% below necessary staffing levels, while 43% of LSRs found themselves in the same predicament, for an overall total of 39%.
Twenty-one percent of operators say they are not operating at the maximum capacity allowed due to not having enough customers to justify reopening. This is split nearly evenly among full service and limited-service, 21% vs 20%. (Survey here.)
“Our nation’s restaurant recovery is officially moving in reverse,” said Sean Kennedy, executive vice president of Public Affairs for the National Restaurant Association. “The lingering effects of the Delta variant are a further drag on an industry struggling with rising costs and falling revenue. We support many of the goals of the Build Back Better Act, but the legislation is too large and too expensive a check for small businesses to take on. Restaurants still need help today and overwhelming them with costly new obligations will only prevent progress in turning the tide of recovery.”
The letter sent to Congress outlined the Association’s opposition to several tax changes being considered as part of the budget reconciliation bill that will significantly increase tax obligations. The Association is also opposed to drastic changes to the enforcement of the National Labor Relations Act (NLRA). To review the National Restaurant Association’s letter to Congress, navigate here.
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