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

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

The trade group surveyed 4,000 operators between Sept. 7 and Sept. 15 and is using the results to lobby against President Joe Biden’s plan to raise the corporate tax rate and proposed changes to the National Labor Relations Act that would allow fines of $50,000 to $100,000 for labor violations. The association is also asking lawmakers to replenish the Restaurant Revitalization Fund, which was created during the pandemic to help keep the industry afloat.

“Restaurants still need help today and overwhelming them with costly new obligations will only prevent progress in turning the tide of recovery,” NRA Vice President of Public Affairs Sean Kennedy wrote in a letter to Congressional leadership.

The delta variant, understaffed restaurants and higher food costs are among the issues plaguing the industry. Just 9% of survey respondents said that business conditions improved over the last three months.

The surge of new Covid-19 cases over the last three months has led to uncertainty over customer demand and potential new government restrictions. Forty-five percent of survey respondents said that their locations weren’t open at full capacity for indoor dining. Morning Consult’s weekly dining tracker has found that 64% of U.S. adults feel comfortable dining at a restaurant. The poll has held steady for the last 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 are short on staff. Among those respondents, 83% said that they are at least 10% understaffed, while 39% are missing more than a fifth of their needed workforce. In response to the issue, restaurateurs are cutting their hours, slashing menu items and reducing seating capacity, which can all impact their revenue.

Menu options are also being impacted by food supply challenges. Only 5% of respondents hadn’t experienced any supply delays or shortages of key drinks and food over the last three months. Total food costs as a percentage of sales have also risen for 91% of operators compared with pre-pandemic levels, dragging down their margins.

Jack in the Box is among the restaurant companies that have announced plans to raise prices as costs for labor and food rise, while Outback Steakhouse parent Bloomin’ Brands has been cutting back on promotions.

And most operators have a pessimistic view of the next three months. Fifty-five percent of operators said they believe their sales will be lower over the coming three months.