Majority of restaurant operators say business conditions are worse now than three months ago, survey finds

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  • More than half of restaurant operators surveyed by the National Restaurant Association say business conditions are worse now than they were three months ago.
  • Delta variants, low-staff restaurants and high food costs are among the issues plaguing the industry.
  • Only 9% of the survey respondents said that business conditions have improved in the past three months.

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More than half of restaurant operators surveyed by the National Restaurant Association say business conditions are worse now than they were three months ago.

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The trade group surveyed 4,000 operators between September 7 and September 15 and is using the results to lobby against President Joe Biden’s plan to raise the corporate tax rate and against proposed changes to the National Labor Relations Act. Labor violations will allow fines of $50,000 to $100,000. The association is also asking 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 obligations will only halt progress in turning the tide of recovery,” Sean Kennedy, NRA vice president of public affairs, wrote in a letter to Congressional leadership.

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Delta variants, low-staff restaurants and high food costs are among the issues plaguing the industry. Only 9% of the survey respondents said that business conditions have improved in the past three months.

The increase in new COVID-19 cases over the past three months has created uncertainty over customer demand and possible new government restrictions. Forty-five percent of survey respondents said their places were not open to indoor dining at full capacity. Morning Consult’s Weekly Dining Tracker found that 64% of American adults eat comfortably at a restaurant. Turnout has been steady for the past four weeks, but is down 7% from its high set on the Fourth of July.

More than three-quarters of operators who took part in the NRA survey said their restaurants were short of staff. Of those respondents, 83% said they are at least 10% short-staffed, while 39% are missing more than a fifth of their essential workforce. In response to the issue, restaurants are cutting their hours, slashing menu items and reducing seating capacity, all of which can impact their revenue.

Menu choices are also being affected by food supply challenges. Only 5% of respondents had not experienced supply delays or major drink and food shortages in the past three months. Total food costs as a percentage of sales also increased compared to pre-pandemic levels for 91% of operators, leading to a decline in their margins.

Jack in the Box is among restaurant companies that have announced plans to raise prices as costs of labor and food increase, while Outback steakhouse parent Bloomin’ Brands is cutting promotions.

And most operators have a pessimistic outlook for the next three months. Fifty percent of operators said they believe their sales will be lower in the coming three months.

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