More than half of the restaurant owners surveyed by the National Restaurant Association say business conditions are worse now than they were three months ago.
The trade group surveyed 4,000 operators between September 7 and September 15 and used the results to campaign against President Joe Biden’s plan to increase the corporate tax rate and proposed amendments to the National Labor Relations Act that allow fines of $ 50,000 to $ 100,000 would labor violations. The association is also calling on lawmakers to replenish the restaurant revitalization fund created during the pandemic to help keep the industry afloat.
“Restaurants still need help today, and overwhelming them with costly new commitments will only prevent progress on the transition,” wrote Sean Kennedy, vice president of public affairs for the NRA, in a letter to the congressional leadership.
The delta variant, understaffed restaurants and higher food costs are among the problems in the industry. Only 9% of respondents said business conditions have improved in the past three months.
The spike in new Covid-19 cases over the past three months has created uncertainty about customer demand and potential new government restrictions. Forty-five percent of respondents said their locations weren’t open at full capacity for indoor dining. Morning Consult’s weekly food tracker found that 64% of US adults are comfortable eating in a restaurant. The poll has held steady for the past four weeks but is 7% below its July 4th high.
More than three quarters of the operators who took part in the NRA survey said that their restaurants were under-staffed. Of these respondents, 83% said they were at least 10% understaffed, while 39% were short of more than a fifth of the manpower they needed. In response to the problem, restaurateurs are reducing their opening hours, shortening menu options and reducing seating capacity, which can affect their sales.
The menu options are also influenced by food supply challenges. Only 5% of those surveyed had not experienced any delivery delays or bottlenecks for important beverages and food in the last three months. The total cost of groceries as a percentage of sales has also increased for 91% of operators compared to pre-pandemic levels, reducing their margins.
Jack in the Box is among the restaurant companies that have announced plans to raise prices as labor and food costs rise, while Outback Steakhouse’s parent company, Bloomin ‘Brands, has cut its promotions.
And most operators are pessimistic about the next three months. Fifty-five percent of operators said their sales will be lower in the next three months.