Congress Might Be Voting On $42 Billion In Restaurant Relief
This week. The U.S. House of Representatives is likely to vote on a $55 billion small business aid package that would distribute $42 billion to the restaurant industry. Replenishment of the Restaurant Revitalization Fund might not be dead yet after the bill was dropped from the Congressional spending package in March: both the House and the Senate are talking about voting on additional relief for the restaurant industry this week. As first reported by Roll Call, the U.S. House of Representatives is “likely to vote” on a $55 billion COVID-19 aid package for small businesses hardest hit by the pandemic, including $42 billion for the restaurant industry. According to a spokesperson for Rep. Dean Phillips (D-Minn.), who has rallied for the bill to be put to a vote, details are still being worked out, but it is “looking like” there will be a vote happening on Thursday. Phillips told Roll Call that he has been working with House Speaker Nancy Pelosi (D-Calif.) “for months” and is hopeful that the bill would receive bipartisan support, especially after President Biden vowed to go after the criminals that have allegedly stolen billions in COVID relief funds.
Restaurants are Getting Creative with Menus
To counter soaring food costs. Restaurants are looking at their menus strategically to manage soaring food and labor costs. Raising prices can only go so far, so some eateries are using menu engineering to draw customers’ attention to items with better profit margins or less dramatic price hikes. Food prices have climbed 7.9% over the last year, according to the Bureau of Labor Statistics’ Consumer Price Index. As food and labor costs rise, restaurants are making strategic changes to menus to avoid reprinting new ones every week. But price hikes can only help so much, especially since weekly changes in the cost of ingredients would mean frequent reprinting. That’s where menu engineering comes in. As food and labor costs rise, restaurants are making strategic changes to menus to avoid reprinting new ones every week. But price hikes can only help so much, especially since weekly changes in the cost of ingredients would mean frequent reprinting. That’s where menu engineering comes in.
Two-Thirds of Restaurants Hurt
By rising gas prices. Higher gas prices have negatively impacted about 68% of small businesses’ recovery efforts, adding to pressures from the pandemic, inflation and other challenges, new data from Alignable finds. Sixty-six percent of restaurant owners say they are struggling with high gas prices. For some, these price jumps have affected delivery sales. This disruption comes as 83% of restaurant owners reported they were still recovering in early March. Gas prices have jumped nearly 50% year-over-year and are hitting record highs in several markets. Rising gas prices are coupled with an inflation rate that’s at a 40-year high and is expected to rise through April, according to CBS News. Some restaurants may be impacted more than others as consumers feel the pinch at the pump. A new AAA study finds that higher gas prices may deter consumers from driving as much, which could lessen their frequency at drive-thru restaurants. This comes as several restaurant chains shift their focus to drive-thru innovations to better capture off-premise spending.
The Restaurant Industry
Two years into COVID. The restaurant industry continues to navigate the COVID-19 pandemic that is still infecting over 20,000 and killing over 1,000 Americans every day. While showing proof of vaccination and some of the other most unpopular protections put in place by health agencies have now been lifted, the restaurant industry is met with new challenges. These challenges include the increase in costs of operations, labor shortages and unpredictable shifts in customer bases. Most restaurants that survived COVID-19 took advantage of the programs available through the Restaurant Revitalization Fund (“RRF”) Paycheck Protection Program (“PPP”) and the Economic Impact Disaster Loan (“EIDL”) programs. The RRF was industry specific while PPP and EIDL were available for other industries. The restaurants that I advise that were able to utilize the RRF were able to position their restaurants for future growth. Restaurants that either didn’t qualify for or did not utilize those funds missed out on a great opportunity. Unfortunately, the hope of additional funding for the RRF were dashed when it was dropped from the spending bill. It looks like, for now, the government assistance has run dry. There are other actions restaurants can take to survive and thrive during COVID-19 and beyond.
Ghost Kitchens to Open Up New Avenues
For Restaurateurs. Ghost kitchens have gained significant popularity in the past few years, especially during the pandemic and post-pandemic era. Various existing and new companies are adopting this trend to reduce operational expenses and risks. As per a recently published report by Future Market insights, the Takeaway and Delivery Food market is going to witness accelerated demand in the coming years with online food platforms. These platforms are gaining popularity among people who wish to dine with their families at home and still wish to enjoy the flavor and quality of restaurant food. In this blog, we will discuss the various facets being utilized to enhance the entire operation of the ghost kitchen efficiently. The reasons for the accelerated growth of this idea, the contribution of POS to these kitchens, the display systems to make the operations easier, and the automated operations used in the inventory as well in the kitchen for easy food management- are some of the ideas that will be discussed in the following paragraphs.
New Pay Disclosure Rules
Set to start for NYC restaurants. Restaurateurs and other employers in New York City are learning what their ads for a job opening will need to include as of May 15 to comply with the city’s version of the recruitment disclosure requirements that are quickly spreading from coast to coast. The mandates oblige employers to include an indication in any recruitment ad of how much an open position will pay. The New York City requirement extends to any job posting, be it a classified ad in outside media or a notice run in an internal channel for current employees. Under guidelines issued by the New York City Council of Human Rights in late March, restaurateurs operating within the city will have to specify “in good faith” the lowest and highest compensation they’re willing to pay anyone hired for the job. In most cases, the rules state, the indication should be a bracket—“from $31,000 to $35,000 annually.”
Third-Party Delivery Companies Sued by Diners
For anti-trust violations. A New York federal judge ruled that the case against Uber Eats, Grubhub driving up menu prices can move forward. Third-party delivery companies are facing more legal scrutiny as a New York federal judge allowed a lawsuit accusing Uber Eats, Postmates, and Grubhub of menu price exploitation to move forward. The anti-trust lawsuit was originally filed in July 2020 and accused the third-party delivery companies of monopolizing delivery prices by not allowing restaurants who contract with them to sell menu items to consumers at lower prices on other platforms, including direct delivery platforms. After the delivery companies moved to dismiss, U.S. District Judge Lewis Kaplan in Manhattan ruled a year and a half after the case was initially filed that requiring operators to accept “no-price competition clauses” gave them “no choice but to raise prices” on every platform.
How Restaurants Charge More
But make you feel like you’re getting a bargain. Restaurants are raising menu prices as wages grow and inflation hits ingredients and packaging. But they still want customers to feel like they’re getting a good deal. That’s a tricky proposal, especially for fast food, fast casual and casual dining restaurants — places where low prices are part of the appeal. Take, for example, Applebee’s and IHOP, owned by Dine Brands. “Both of our brands are value brands, and that’s particularly important right now,” said Dine Brands (DIN) CEO John Peyton during a March analyst call.” That means franchisees are walking “a tight rope … maintaining value for our customers as well as protecting their margins.” IHOP and Applebee’s franchise operators raised prices between three and four percent last year. Usually, those prices go up somewhere between one and three percent annually.
Did You Know?
NJBIA 2022 Business Climate Analysis Shows NJ Still Worst in Region. As part of its recent budget testimonies provided to the Legislature, NJBIA has released its updated 2022 Regional Business Climate Analysis showing New Jersey continues to significantly trail the rest of the region in business climate. The analysis shows New Jersey is maintaining the highest corporate business tax rate, state sales tax rate and property tax paid as a percentage of personal income, as well as the second highest top income tax rate, in the region. NJBIA analyzed six individual business cost drivers in seven states and, using a scoring system of those metrics, determined New Jersey ranks at the bottom overall behind Massachusetts, Connecticut, New York, Pennsylvania, Maryland and Delaware.
Restaurant job growth slows in March as jobless rate dips to 3.6%. Restaurant job growth slowed in the first quarter, but total nonfarm payroll employment rose by 431,000 in March, and the unemployment rate slipped to 3.6%, the U.S. Bureau of Labor Statistics reported Friday. Employment in leisure and hospitality continued to increase, with a gain of 112,000 jobs in March. Foodservices and drinking places added 61,000 jobs and accommodations added 25,000, the agency said. Employment in leisure and hospitality is down by 1.5 million, or 8.7%, since February 2020, the month before the COVID pandemic was declared. The unemployment rate declined by 0.2 percentage point to 3.6 percent in March, and the number of unemployed people decreased by 318,000 to 6 million.
Bielat Santore & Company – Restaurant Industry Alert
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