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Business Conditions Are Worse Now than Three Months Ago, Says National Restaurant Association

A recent survey conducted by the National Restaurant Association found that the majority of restaurant operators are facing increased costs and decreased profits. Pictured is a restaurant property occupied by Raising Cane's Chicken Fingers that recently opened in Barstow, Calif.

WASHINGTON, D.C. — The majority of full-service and limited-service restaurant operators say that business conditions are worse now than they were three months ago, according to a new survey conducted by the National Restaurant Association. The study found that 44 percent of operators think it will take more than a year before business conditions return to normal, and 19 percent believe they never will.

The National Restaurant Association conducted the study from Sept. 7-15 and surveyed 4,000 restaurant operators nationwide.

Although the industry has added back many of the jobs lost during the pandemic, 78 percent of operators say their restaurant does not have enough employees to support current customer demand.

Rising costs are impacting restaurants too. According to the survey, 91 percent of operators are paying more for their food; 84 percent have higher labor costs; and 63 percent are paying higher occupancy costs. At the same time, profitability is down — 85 percent of operators reported smaller margins than prior to the pandemic.

While August is typically one of the busiest months for restaurants, 63 percent of operators reported that their sales volume for August 2021 was lower than it was in August 2019.

Additionally, 78 percent of operators say their restaurant experienced a decline in customer demand for indoor and onsite dining in recent weeks due to the Delta variant spike.

During the past three months, 95 percent of restaurant operators said they experienced supply delays or shortages of key food or beverage items.

“Our nation’s recovery is officially moving in reverse,” says 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.”

The National Restaurant Association sent a letter to Congressional leaders sharing the survey findings. The association opposes President Joe Biden’s plan to increase the corporate tax rate. An increase would cost companies, including restaurants, over $540 billion and give restaurants fewer opportunities to invest in employee growth and expansion, according to the organization.

The association also opposes President Biden’s proposed changes to the National Labor Relations Act that would allow fines of $50,000 to $100,000 for labor violations. Doing so would upset the longstanding and well-established balance in labor management law, argues the organization.

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 1 million restaurant and foodservice outlets and a workforce of 15.6 million employees. The organization is based in Washington, D.C.

— Kristin Hiller

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