Restaurants to Congress
Our recovery is moving in reverse. The National Restaurant Association last week sent a letter to Congressional leaders sharing unfavorable new operator survey findings and warning of harm that provisions of the Build Back Better Act could imposed on restaurant industry rebuilding. In a new national survey of restaurant operators, research indicates that deteriorating business conditions are impacting operators’ outlook in such a way that they believe a recovery from the pandemic will be prolonged well into 2022. Overall, a majority of full service and limited-service operators say business conditions are worse now than three months ago. Additionally, 44% of operators think it will be more than a year before business conditions return to normal and 19% believe they never will. The survey also found…
Restaurants’ Fragile Recovery Is Fizzling
In the U.S. Customers are back but the rebound is threatened by soaring food prices and labor shortages. A survey found that 51% of small restaurants in the country couldn’t pay their rent in September. After a brief glimpse of normalcy this summer, the fragile recovery in the U.S. restaurant industry is sputtering. Data and interviews with restaurateurs point to a deterioration in finances due to surging costs for everything from salmon to uniforms and labor shortages. A survey found that 51% of small restaurants in the country couldn’t pay their rent in September, up from 40% in July. unlike during most of 2020, today’s struggles aren’t visible with the naked eye: Customers are still flocking to eateries, for the most part, in spite of rising prices and lingering fears of the delta coronavirus variant. But the anxiety over mounting expenses is palpable among restaurant owners from New York City to Nashville, Tennessee.
Customer Demand for Outdoor Dining Rose
Due to the delta variant. With indoor capacity limited throughout much of the pandemic, the ability to offer outdoor dining is a lifeline for many restaurants. In a September 2021 survey fielded by the Association, 65% of restaurant operators said they offered on-premises outdoor dining in a space such as a patio, deck or sidewalk. That’s up from 57% in April 2021, and roughly on par with the 67% who reported similarly in September 2020. Seventy-two percent of full-service operators say their restaurant offered on-premises outdoor dining in September, while 57% of limited-service operators offered on-premises outdoor seating in September. Outdoor dining represents a significant proportion of business for restaurants that offer it. Overall, 35% of operators that offer outdoor seating say it accounts for more than 40% of their average daily sales. Fifteen percent of operators say it represents more than 70% of their daily sales.
Restaurant Industry in Worse Shape Today Than Three Months Ago
According to survey. The restaurant industry is in worse shape now than it was three months ago, according to a new survey by the National Restaurant Association. Seventy-eight percent of restaurant operators said they have experienced a decline in customer demand in recent weeks because of Delta variant concerns, according to survey data released Wednesday. That, along with rising costs of food, has sliced already razor thin margins for the industry. Of those surveyed, 91% of restaurants said they’re paying more for food and 84% have higher labor costs despite labor shortages leaving them unable to keep up with demand, the survey indicated. Meanwhile, 71% of restaurants are understaffed while struggling with supply shortages. Nearly every restaurant surveyed — 95% — said it had experienced supply delays or shortages of key food or beverage items in the past three months.
SNAP Benefits Could Soon Extend to Restaurants
In more states. New York could soon be added to the shortlist of states that participate in the restaurant meals program (RMP) as part of the Supplemental Nutrition Assistance Program (SNAP). According to WWNY, Gov. Kathy Hochul signed a bill Monday establishing statewide participation. Now, New York will have to apply to the U.S. Department of Agriculture for approval. “States considering implementing an RMP must weigh whether they would be able to target those most vulnerable and provide them with access to prepared meals,” a USDA spokesperson said. RMP is an initiative run at the state level that allows low-income households with seniors, disabled or homeless members to use SNAP benefits to purchase discounted meals from authorized restaurants, according to the USDA.
How Remote Workers Impacted the Food Service Industry
Life during COVID-19 has changed dramatically. As more people receive the COVID-19 vaccine and states lift their social distancing and mask requirements, offices are reopening. However, this doesn’t necessarily mean everyone will return to the workplace. It’s expected that 3.9 million Americans will continue to work from home for at least half the week for the remainder of the pandemic. This increase in work-from-home employees raises some questions. Are people still grocery shopping? Are they dining out? How will this data impact the food industry? Here is more information about the state of the food service industry, how it’s changed due to the pandemic and what to expect shortly.
Restaurants Can Separate Themselves
With creative marketing programs. Marketing programs and strategies for restaurants are constantly evolving. Most restaurants are now conducting research on the competition several times a year. This can mean going out into the field, examining other restaurant operations, as well as taking a deep dive into digital strategies. While this is a common practice for larger brands, it may not be feasible for smaller restaurants who simply lack the time or resources. No matter the size or scope of your enterprise, restaurateurs can identify direct competitors, those in the overall food service industry and other successful retailers to spot marketing ideas that are being executed successfully. Sometimes, all it takes is one trendy idea. Given the recent cache around their fried chicken sandwich, you would think Popeyes invented the concept, even though direct competitors feature similar items. That’s excellent marketing. Restaurateurs would do well to keep in tune with their competitors, pay attention to what is working in tangential markets, and rely upon their franchisees to update them about what food items are most popular in their areas. While we don’t want to directly copy others, we can generate ideas by seeing what is working for them.
Recipe for Revenue
Why restaurants are becoming host kitchens. Restaurants are leveraging unused kitchen capacity to become host kitchens, facilitating the delivery of other brands and raking in extra cash. When Manhattan-based Otto’s Tacos had to permanently close its four units due to the pandemic, Micha Magid, co-CEO of neighboring restaurant Mighty Quinn’s, came up with a solution to keep it alive. The barbecue chain brought the taco brand, which has built a strong customer following over the last nine years, into its back of house and turned it into a delivery-only brand in December 2020. Magid, who had befriended Otto’s Tacos owner Otto Cedeno over the years — their respective restaurants were only two blocks away from each other — said the partnership is mutually beneficial. Mighty Quinn’s was able to add a new business with very little capital investment — it only had to install a flat top grill to accommodate Otto’s Tacos — and began generating revenue from the concept on day one, Magid said. Cedeno and his culinary team trained the Mighty Quinn’s staff to make sure the menu of tacos, bowls and salads matched what customers expected. And Otto’s Tacos is generating licensing fees, Magid said.
Did You Know?
New study finds 51 percent of small restaurants couldn’t pay September rent. This past summer was supposed to be boom times for restaurants. Everyone knows how that turned out, after concerns over the Delta strain put a damper on the summer. Unsurprisingly, Bloomberg reports, the restaurant industry’s brief summer recovery has fizzled out, and last week, the Independent Restaurant Coalition hosted a press conference calling on Congress to add more money to the Restaurant Revitalization Fund. More than 370,000 business owners applied to the fund, which ran out of money in July (265,000 were turned away). And one of the surest signs that the entire industry is still in deep trouble is a new survey showing that the majority of small restaurants could not pay their rent in September.
Employee benefits key to attracting (and retaining) employees. The hospitality business is undergoing a tough time re-hiring, hiring, and retaining front and back of house personnel. Attracting and retaining restaurant employees is not an easy task while navigating business operation during a pandemic. In fact, the overall turnover rate in the restaurants-and-accommodations sector was 74.9 percent in 2018. Given the ripple effect of COVID-19, restaurants have been hard-pressed to staff their operations to pre-pandemic levels. How can you attract talent? Employee benefits just might be the answer.
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