Hotels and Restaurants Can’t Levy Service Charge by Default
Says CCPA. The Central Consumer Protection Authority (CCPA) on Monday barred hotels and restaurants from levying service charge by default in food bills and allowed customers to file complaints in case of a violation of the norms. There should not be any collection of service charge by any other name, it added. The hotels have to clearly inform the consumer that paying the service charge is at the consumer’s discretion, the CCPA said. The guidelines empower consumers to complain against the practice under various provisions of the Consumer Protection Act, tagging it as an ‘unfair trade practice,’ and a violation of consumer rights. “No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers,” it added. It is part of the guidelines, which means that legal action can be initiated against the restaurant by the CCPA, as under the new Consumer Protection Act it is empowered to take action under relevant portions of the law. CCPA also said that service charge cannot be collected by adding it along with the food bill and levying GST on the total amount.
The Effects of Inflation on Restaurants
How to combat decreased demand. While 2021 was the year of the comeback for restaurants, 2022 is proving to be a very different story. Record-high inflation is hitting consumers from every angle – gas, groceries, rent – and restaurants tend to be the first place they cut spending. Restaurant traffic, while recovering and up nine percent in 2021 compared to 2020, is still 4 percent below pre-pandemic levels, with smaller chains and independent restaurants down by nine percent, according to a study by The NPD Group. The lingering pressure from inflation – with no end in sight – is starting to shift consumer behavior in meaningful ways. Substantial price hikes on restaurant menus are causing consumers to choose other options aside from eating or taking out, and a ‘tipping point’ is on the horizon where inflation will depress overall demand. In fact, research from Vericast’s recent restaurant report indicates that 60 percent of consumers feel that rising prices have already made eating out too expensive.
The Restaurant Industry Union Movement is Gaining Momentum
Here’s what to expect. As the number of unionized Starbucks stores grows daily (now past 170 unionized locations), and is now joined by the first Chipotle store that just filed for unionization this month, where is the labor movement headed for the restaurant industry? Right now, the momentum seems unstoppable thanks to a concoction of factors, including a shrinking labor pool, a recession looming on the horizon, and a Democratic president in the White House, experts say. All these factors have given retail and service industry employees the confidence to grab a seat at the table, though that might not last forever. Nation’s Restaurant News spoke with two labor attorneys on opposite sides of the issue: Camille Bryant, an attorney at McGlinchey Stafford in New Orleans who represents employers and Barry Saltzman, an attorney at Pitta Law in New York who has represented both labor unions and employers. “For the most part, wages have not kept pace, and they’ve been driven down,” Saltzman said. “Now, the big labor shortage is giving workers leverage to negotiate because of course, companies need the workers. And if you have the leverage, you can form a union and the union has to be listened to or else these companies will lose their workers.”
The Evolution of The Restaurant of The Future
Changes, Investments, Transitions. Change is here. Never in recent history have we experienced forces of disruption like we are seeing today. Savvy operators have adopted a new mindset of evolving with the market and optimizing their business models to take advantage of new opportunities, such as the growth of off-premises. Before, many operators were waiting for the “next normal” to begin, and, by necessity, spending all their time solving the “problems of the day,” such as finding substitutes for products they didn’t receive or figuring out how to run the business shorthanded. Over the past year, many restaurant brands have seen sales come back to 2019 levels or greater. But are they making money? Price increases have inflated sales numbers, yet even with aggressive cost management, many restaurants are still not as profitable as pre-pandemic. Kinetic12’s recovery roadmap (below) hypothesizes the industry has moved into the phase of the journey called “Transition 3: Define.” In this phase, we see operators assessing the changes they made through the pandemic and in the transition out of it to determine what should stick and what additional changes are required.”
Rent Is Less Unreachable for Restaurants in June
Percentage of places that couldn’t meet their lease obligations declined. The percentage of U.S. restaurants that couldn’t pay their June rents declined three points from the default rate for May, even with many landlords aggressively hiking their charges to counter inflation, according to a survey by the Alignable Research Center. Still, more than a third (38%) of the nation’s eating places couldn’t meet their full lease obligations on time, with the data pointing to galloping costs as the reason. The researcher found that nearly half the 4,382 small businesses it canvassed had been hit with rent hikes for June, with about a third of those saying the increase exceeded 10%. Roughly 14% said they were charged at least 20% more. Although the proportion of restaurants that couldn’t cover rent declined for the month, the industry still had a higher default rate than the other small-business fields Alignable included in its report. Across all those businesses, 35% could not pay their full rents on time. That’s the highest rate of non-payment clocked this year by Alignable.
Most Restaurants Are Still Short-Staffed
Even as demand recovers. Thirty percent of restaurant owners said business has returned to pre-pandemic levels, according to survey by Popmenu, while 25% said it has surpassed them. Popmenu surveyed 374 restaurant owners and operators and 1,002 customers regarding conditions in the foodservice industry in May and June. Respondents reported staffing challenges were hurting business. A majority (51%) of restaurateurs surveyed said their businesses lacked the staffing to meet on-premise dining levels this summer. Popmenu’s survey of consumers indicates staffing challenges and rising foot traffic are impacting customer experiences, with 59% of respondents increasing their digital ordering due to long waits and lack of tables. Operators are missing out on on-premise sales as a result of low staffing levels, Brendan Sweeney, Popmenu’s CEO, said in the press release. “This can be incredibly frustrating for restaurateurs — and their customers — which is why more are relying on guest-facing technology to make operations more efficient and capture revenue opportunities that would have otherwise been missed,” Sweeney said.
Popular New Jersey Restaurant Owner Tommy Bonfiglio
Dies at 62. Thomas J. Bonfiglio, who built up a chain of restaurants from the Shore to North Jersey and beyond, even as the COVID-19 pandemic shuttered similar businesses, died Friday. He was 62 years old. He and his family opened two restaurants in Clifton within the last two years ― Tio Taco + Tequila Bar last summer and Tommy’s Tavern + Tap in December of 2020 ― and their inventory of restaurants more than tripled during the pandemic. Bonfiglio, who practiced law and was a certified public accountant for decades, told NorthJersey.com last year that the physical size of his restaurants allowed them to weather the pandemic; they were large enough to accommodate hundreds of people while allowing them to maintain social distancing once indoor dining was allowed. He had three restaurants at the start of the pandemic in early 2020 and had 10 by the middle of last year after moving his businesses into several restaurants that had closed.
Did You Know?
Summer is time to heat up restaurant marketing. h summertime. Longer days, hotter temperatures, pools, beaches and vacation season. And rising temperatures lead to rising consumer spending. Researchers call this the “temperature-premium effect,” meaning that warmer temperatures make people feel emotionally warm and better about spending money. The restaurant industry is no stranger to busier summer months, as 48 percent of people say they dine out more in the summer than any other season. Whether it is a group of friends hitting up patio happy hours or families dining out on a road trip, the fact is that people are filling up restaurants and searching for the perfect dining experience. Here are three key ways restaurants can make sure they are found by people looking for the perfect summer dining experience.
Can restaurant design improve employee retention? As restaurants continue to deal with the staffing fallout from the Great Resignation, a renewed focus on employee culture and wellbeing is being seen across the country. But while many restaurant owners assume that higher wages and paid sick leave will decrease turnover, many are overlooking the role that restaurant design plays. By applying a human-centered design approach to constructing restaurants, we can begin to enhance the experience for front- and back-of-house staff, which is critical to their long-term retention. Here are six design elements that can help restaurants be a better place to work.
Bielat Santore & Company – Restaurant Industry Alert
MIDDLESEX COUNTY, NJ “RESTAURANT – BAR” FOR SALE
Photo shown to illustrate Restaurant-Bar only. Not actual representation.
Well-maintained Middlesex County, NJ restaurant and bar; highly visible highway location; free-standing 6,092 square foot on 2-acre lot; classic design & décor; completely remodeled; bar seats 70, 130 for dining and 100 outdoors; currently grossing $2M+ far below facility potential; financing available to qualified.
Contact Richard Santore, 732.531.4200 for additional information.
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