New National Restaurant Association survey finds the economy is disrupting service across industries
Washington, August 18, 2022 /PRNewswire/ — At Jenga®, it’s now the daily turn to run a restaurant, with operators carefully pulling from the ground up in business plans to support new support in a changing economy.
The cost of the goods restaurateurs need most continues to accelerate, with 46% of restaurant owners saying their current business conditions are worse than they were three months ago, according to a new survey released today by the National Restaurant Association. says there is.
The findings follow a previous survey in which 43% of operators said they believed the situation would worsen in the next six months, the highest level of pessimism since 2008.
“Owning a restaurant is a balancing act that requires adaptation and innovation, two areas where restaurateurs excel. Michelle Corsumo, President and CEO of the National Restaurant Association. “And while operators are more pessimistic about the economy, they are working hard to continue to deliver quality and value to their customers. remains the foundation of every restaurant.”
Findings from a new survey highlight how the current economic conditions are disrupting the industry.
Soaring costs limit restaurant operations
About 95% of a restaurant’s revenue is spent on food, labor and operating costs, all of which are increasing month by month. Wholesale food prices have risen 16.3% in the past 12 months, but menu prices have risen only 7.6% over the same period, adding fees and surcharges to customers’ checks, he reported. He was only 16% of the operators who did. Result: Profits suffer. His 85% of operators said their restaurants were less profitable compared to 2019.
- A new survey found that 88% of businesses said their total food and beverage costs were higher than in 2019, with many other costs also increasing overall.
- 65% of operators say their total cost of occupancy is higher than in 2019
- 80% of businesses say their total utility bills are higher than in 2019
- 94% of operators say other operating costs (consumables, general and administrative expenses, etc.) are higher than in 2019.
“Consumers are seeing grocery store prices rise faster than restaurants, and believe it is becoming more worthwhile to spend their food dollars at restaurants. Unbalanced input costs are forcing operators to cut costs: shortening hours, changing menus, postponing expansions and reducing third-party deliveries,” said Korsmo. I’m here.
Pandemic debt is due and operators can’t pay
In the first two years of the pandemic, 65% of restaurants adjusted their business models and took on new loan obligations to stay open. The loans were a mix of permissible government loans, government disaster loans and private sector loans, according to a new study.
- Paycheck Protection Program (PPP) loans were the most common, used by 59% of businesses.
- 48% of businesses have taken out an Economic Injury Disaster Loan (EIDL) issued by the US Small Business Administration or a lending partner.
- 31% received a private sector loan from a bank, credit card or other entity.
“For many businesses that have received EIDL loans, the payment grace period will soon end, and starting to pay off now will be an overwhelming challenge for the majority of businesses,” Korsmo said. increase. “According to our latest survey, only 23% of businesses that have not started repaying loans said they were able to make principal and interest payments. I expect to be able to pay for the book, but I don’t have a 30 month unpaid period. Interested.”
Restaurants slowly adding jobs to return to pre-pandemic employment levels
The majority of restaurants are aggressively filling positions despite facing the headwinds of a slowing economy. Despite adding 74,000 jobs in July, a new survey found that 65% of operators reported not having enough employees to support customer demand, and 84% of operators It said it is likely to hire additional employees in the next six months.
- 19% of full-service operators say their restaurants are currently 20% or more below required staffing levels.
- 21% of limited-service operators say their restaurants are 20% or more below required staffing levels.
- 81% of business owners say their restaurants currently have hard-to-fill vacancies.
“Diners choose restaurants for the hospitality and experience they get at our table. We hire talented people to create that atmosphere. , our industry continues to reshape its workforce.There are high-paying jobs in the restaurant industry.People from all backgrounds are available at all experience levels.And these jobs are open to all. It gives you the skills you need to be successful in your career and in life,” says Korsmo.
A research group from the National Restaurant Association conducted a new operator survey of 4,200 restaurant operators. July 14th to August 5th, 2022Read our report on key findings here.
About the National Restaurant Association
Founded in 1919, the National Restaurant Association is the leading business association of the restaurant industry, with nearly 1 million restaurants and foodservice establishments and 14.5 million employees. With 52 state associations, we are a network of professional organizations dedicated to serving all restaurants through advocacy, education and food safety. We sponsor the industry’s largest trade show, the National Restaurant Association Show. A leading food safety training and certification program (ServSafe). A unique career building high school program (NRAEF’s ProStart). For more information, visit Restaurant.org and search for @WeRRestaurants. twitterFacebook, YouTube.
Sauce National Restaurant Association
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