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Restaurants Say Conditions Worse than Three Months Ago as Sales Slow

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Restaurants Say Conditions Worse than Three Months Ago as Sales Slow

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

At the same time, sales are sagging. Here’s a look at the key factors at play:

WORSENING CONDITIONS

The delta variant, understaffed restaurants, and higher food costs are all adding to the worsening conditions in the industry, reported CNBC (Sept. 29). Only 9% of those surveyed said business conditions improved over the last three months.

Forty-five percent of respondents said that their locations were not open at full capacity for indoor dining, although Morning Consult’s weekly dining tracker found that 64% of U.S. adults feel comfortable dining at a restaurant.

Additionally, more than 75% of operators who took part in the survey said their restaurants are short on staff. An eye-opening 83% said they’re at least 10% understaffed, while 39% are missing more than a fifth of their needed workforce.

This has led to restaurants cutting hours, removing menu items, and reducing seating capacity—all impacting their revenue.

FALLING SALES

Food Institute analysis (FI Membership Required) of Bureau of Census data found sales at foodservice and drinking places fell at an unadjusted rate of 2.8% in August when compared to July. That was compared to a 5.2% increase posted between July and June.

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Although the August figures were well above the year-ago pandemic period (+31.6%), even that was slowing comparatively: July sales were 39.9% higher than July 2020, and June sales were up 40.9% compared to 2020.

BlackBox Intelligence also reported sales growth was slowing, saying same-store sales were up 6.13% in August when compared to the pre-pandemic baseline of August 2019. Comparable traffic dropped 5.44% during the period. Meanwhile, July data showed same-store sales were up 8.10% year-over-year, while comparable traffic was only down 3.69%.

NRA LOBBIES AGAINST PLAN TO RAISE CORPORATE TAX

The NRA is using the results of its survey to lobby against President 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 keep the industry afloat.

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