The State of Full-Service Restaurants
In the USA. Seventy-four percent of full-service restaurants (FSRs) managed to maintain or increase their sales during the pandemic; however, profit margins in 2021 declined to 10 percent, compared to 12 percent in 2019, according to third annual State of Full-Service Restaurants Report released by TouchBistro. Additional findings include increased inventory costs caused the greatest financial strain for operators in 2021 with 33 percent citing it as their top expense, followed closely by rent (30 percent) and labor (30 percent). Many operators also noted that the cost of implementing new health and safety measures – such as providing PPE for staff and upgrading their HVAC systems – was another major expense that wiped out any revenue gains in 2021. “From social distancing measures to the rise of QR code menus, the way operators must now run restaurants has significantly changed since the onset of the pandemic,” says Samir Zabaneh, CEO of TouchBistro. “While our findings reveal just how much has changed since our 2020 report, they also show how resilient FSRs have been throughout these extraordinary times. From managing an off-premise presence with online ordering platforms to navigating the labor shortage and keeping costs down, it’s clear from the emerging trends we are seeing that technology is at the heart of helping FSRs not only survive but make gains during these extremely challenging times.”
The Restaurant Business Will Probably Never Recover from Covid
Don’t call us, we won’t call you. The restaurant industry will likely never return to its pre-pandemic state, according to the National Restaurant Association. The trade group says 2022 will be a “new normal,” for the sector as it struggles to rebound and as competition for workers remains intense, according to the association’s 2022 State of the Restaurant Industry report, which was released Tuesday. Restaurants and their patrons have found themselves in a ‘new normal.’ Given emergent technology, changing consumer behavior and dining preferences, and the extraordinary challenges of the last two years, the industry is unlikely to ever completely return to its pre-pandemic state,” said Hudson Riehle, senior vice president of the Research and Knowledge Group at the National Restaurant Association.” Pent up demand from consumers will help in 2022 — the group predicts sales will continue to rise, forecasting sales this year of $898 billion, up from $864 billion in 2019. Yet just one in four restaurant operators believes their restaurant will be more profitable this year than last.
Restaurants Face a Long Road to Recovery
Even as Omicron wanes. Restaurants — scarred by COVID-19 and related restrictions — may never climb back to pre-pandemic levels, a grim new report suggests. According to the National Restaurant Association’s latest industry report, the beleaguered sector is being held back by staffing shortages worsened by the Great Resignation, surging prices and other structural issues that have hindered a complete recovery. And there’s almost no end in sight, even as the Omicron wave of infections have fallen steeply. “Of all the industries in America, the restaurant industry was the one that was most severely impacted in terms of employment and sales declines,” Hudson Riehle, the trade group’s senior vice president for research, told Yahoo Finance Live in a new interview. “Tens of thousands have gone out of business…it’s a long road to recovery,” the analyst added.
60% of US Small Biz Owners Still Can’t Find Workers
To hire. The small business labor shortage is still a major threat to the recovery of many different industries, nine months after it began. Alignable’s Small Business Labor Poll, conducted among 6,367 small businesses from 1/15/22 to 2/3/22, shows that 60% of all small business employers in the U.S. still can’t find the right workers to fill open jobs. Many industries and disadvantaged groups of small business owners cite percentages that are much higher than the already-daunting 60% figure — demonstrating the cumulative effects of this months-long hiring crisis. In many cases, if companies like retail shops and restaurants don’t have the staff to help them stay open, they don’t generate the revenue they normally could. Many need to cut their hours, which further exacerbates their economic status — and doesn’t inspire much consumer confidence in the health of their businesses, either. Other issues that have also slowed or reversed recoveries include Omicron.”
Pennsylvania Eyes More Aid
For small businesses. Gov. Wolf says $225 million of $1.7 billion in funding from the federal government should go to restaurants and other enterprises with less than $1 million in pre-pandemic revenues. Restaurants and other small businesses in Pennsylvania could qualify for aid grants of up to $50,000 under a comprehensive COVID relief plan proposed last week by Gov. Tom Wolf. The governor has requested that $225 million in federal funding already committed to the state be channeled into an existing but depleted assistance initiative, the COVID Relief Statewide Small Business Assistance Program. The grants of $5,000 to $50,000 could be used for operating expenses or for the “technical assistance” needed for a major shift in direction, such as converting a catering hall into a takeout restaurant. The assistance would extend to such needs as retraining a staff. Only businesses that had less than $1 million in annual revenues or 26 employees prior to the pandemic would be eligible for the grants.
The Supply Chain Backlog May Not Clear
Anytime soon. Delays in equipment deliveries continue to cause headaches for new-unit development. And the problems could persist for a while. While much of the restaurant industry’s focus at the moment has been on a shortage of labor and rising food costs, one issue continues to persist and could be here for some time: The inability to get equipment. Operators have to wait several months to a year to get certain pieces of equipment into their restaurants. The problem has created headaches and conspired with other issues, like permitting delays and a lack of construction workers, that is making it harder to build new locations. “It’s equipment, it’s not the building,” Dan Accordino, CEO of big Burger King franchisee Carrols Restaurant Group told the ICR Conference last month. “We’re having a devil of a time getting equipment.” He noted that fryers for Popeyes take seven to nine months.
Owning a Restaurant
Pros and Cons of buying vs renting. If you’re in the process of searching for a site in which to open a restaurant – or if you wish to move or expand your existing business to an additional location – it’s important to consider whether you’ll be buying or renting. In this article, we look at the pros and cons of both renting and buying to help you decide which approach will be best for your unique venture. Depending on your specific circumstances, one approach may clearly outweigh another when comparing your options. One important factor to understand is that if you are not purchasing real estate, financing will be extremely difficult to secure. Lending institutions are looking for bricks and mortar as their collateral. If you’re not sure whether buying or renting is best for your business, it may be best to speak with your accountant or with a commercial real estate specialist to help you make the decision.
Restaurants Are Covering All Bases
With Valentine’s Day and Super Bowl a day apart. The upcoming extended weekend can turn out to be a blockbuster or a bust, depending on the whims of consumers. Super Bowl and Valentine’s Day fall on the same long weekend this year, which complicates what can be two of the most-lucrative events for restaurants. In the pre-pandemic month of January 2020, Open Table reported that on average, restaurant dinner reservations on the network surged 500% for Valentine’s Day. Although the pandemic didn’t measurably ruin business that year, 2021 numbers were way down for romantic dinners inside a restaurant. Even with vaccinations more widespread, 2022 may not be much better, according to Morning Consult’s food and beverage analyst Emily Moquin. Although half of Americans plan to celebrate Valentine’s Day this year, restaurants shouldn’t count on a rush, she said in a statement. Only 43% of celebrants plan to go out to dinner compared to 69% who said that pre-pandemic.
Did You Know?
Whiskey sales start comeback in bars, restaurants. Despite ongoing challenges from the pandemic, American whiskey producers toasted another year of growth. Combined U.S. sales for bourbon, Tennessee whiskey and rye whiskey rose 6.7%, or $288 million, to $4.6 billion in 2021, the council said. Domestic volumes rose 4.5% to 29.7 million cases. Demand for super-premium brands, which fetch the highest prices, continued to surge last year, the council said. Super-premium volumes rose 15.6% in the bourbon, Tennessee whiskey and rye segment last year, the trade association said. Industrywide, overall sales and volumes grew for U.S. distilled spirits suppliers, and the spirits industry again increased its share of the total beverage alcohol market.
Demystifying the New 80/20 Tipping Rule. At a dizzying 137 pages long, the 80/20 tipping rule was signed into legislation in October. Taking effect on December 28, 2021, the rule is proving confusing to owners, operators, and tip-producing and non-tip producing employees (especially since often that employee is one and the same within any given shift). Whether or not the law is repealed, it’s being enforced now, and restaurant owners and operators need to get up to speed, and fast, to ensure they get–and stay–in compliance.
Bielat Santore & Company – Restaurant Industry Alert
BIELAT SANTORE & COMPANY SELLS ANOTHER NEW JERSEY RESTAURANT TO DAVID BURKE!
According to Richard Santore of Bielat Santore & Company, Allenhurst, New Jersey, the broker for the sale, David Burke and an unspecified real estate investor purchased the former Piero’s Restaurant, located at 1411 Highway 36, Union Beach, Monmouth County, New Jersey. Burke plans on transforming the white-tablecloth Piero’s Restaurant into a casual Italian American Bistro, highlighted by an exposed brick oven where pizza will be the featured food. “We are going to have meat dishes, chicken dishes, salads, but everything will evolve around pizza,” says Burke. And as far as the writer knows, Burke is armed with a one-of-a-kind pizza recipe that he expects to soon become the GOAT.
Click here to read more about the sale
WE ARE LOOKING FOR NEW INVENTORY FOR REGIONAL RESTAURANT COMPANIES
SEEKING IMMEDIATE EXPANSION!
Bielat Santore and Company currently represents a select collection of regional restaurant companies who are seeking growth opportunities in New Jersey; through the purchase of existing restaurants that contain land, building and liquor licenses. In 2020-21, the firm closed numerous transactions with these companies. These restaurant companies are internally funded, have established banking relationships, are corporately managed and can move expeditiously toward a closing on the right locations.
If you would consider a sale of your restaurant assets, contact Richard Santore, 732.531-4200.
We invite you to visit our website, where you will find all our current listing inventory, a library of helpful industry resources and a collection of client testimonials expressing their assessments on our work and our service within the restaurant industry.
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