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Restaurant operators say business conditions have significantly DECLINED
By Arsenio Toledo // Oct 05, 2021

A majority of restaurant operators in the country believe business conditions today have significantly declined compared to three months ago. This is according to a survey released on Wednesday by the National Restaurant Association (NRA).


The NRA is the leading business association lobbying for the interests of restaurant owners, representing 400,000 restaurant locations across the country. The association is currently focusing its efforts on making sure the restaurant industry recovers after it was hit hard by the Wuhan coronavirus (COVID-19) pandemic.

The association's latest survey was taken between Sept. 7 and 15. It involved asking more than 4,000 restaurant operators questions regarding the state of their business.

According to the survey, 58 percent said business conditions for their restaurants are worse now than they were three months ago. Only nine percent said conditions for their business improved during this time.

Forty-four percent of the restaurant owners believe it will take more than a year before conditions in their businesses return to normal. Twenty-three percent believe it will take seven to 12 months for the situation to normalize. Nineteen percent believe their restaurants are never going to recover.

Nearly 80 percent of restaurant operators have seen a significant decline in customer demand, especially for indoor and on-premises dining. Even with the declining demand, 71 percent of the operators said they still do not have enough staff members to handle the number of customers they still receive despite efforts to bring back many of the jobs that were lost.

The increase in food prices has also made the situation for restaurant owners more difficult. Ninety-one percent of operators said food costs as a percentage of sales have risen compared to pre-pandemic food prices. Eighty-four percent have reported higher labor costs. Over 60 percent said they are also paying higher occupancy costs. (Related: Restaurants look to ROBOTS to fill openings amid labor shortage.)

All these added costs have put a dent into their profits, with 85 percent of operators reporting smaller margins compared to pre-pandemic levels.

Lastly, only five percent of operators said they have not experienced any supply delays and shortages for food or beverage items in the past three months.

Biden's proposed tax hike would worsen the situation for restaurant operators

The NRA released the results of this survey on the same day it sent a letter to leaders of Congress raising concerns regarding the $3.5 trillion reconciliation package, better known as the Build Back Better Act (BBBA). In this package, President Joe Biden and the Democratic Party are planning to raise the corporate tax rate.

Biden is also proposing changes to the National Labor Relations Act (NLRA), which would allow workers to sue their employers for between $50,000 to $100,000 for supposed labor violations.

"The restaurant industry would be one of many small businesses that would see their tax liabilities increase as a result of the BBBA," reads the organization's letter to congressional leaders. "Congress has done admirable work to provide a lifeboat for restaurants during the pandemic, and should not reverse these efforts with a multitude of higher taxes."

Sean Kennedy, executive vice president for public affairs for the NRA, said the "recovery is officially moving in reverse."

He added that while the association supports many of the goals in the reconciliation package, "the legislation is too large and too expensive a check for small businesses to take on" and will in turn "only prevent progress in turning the tide of recovery."

Instead of taxing restaurant operators even further and making what the NRA calls "unprecedented changes" to the NLRA that "could bankrupt many businesses," the group is calling on Congress to replenish the Restaurant Revitalization Fund (RRF).

The RRF was created during the height of the coronavirus pandemic to help keep the restaurant industry afloat.

"Restaurants still need help today and overwhelming them with costly new obligations will only prevent progress in turning the tide of recovery," said Kennedy.

Learn more about the obstacles preventing many of America's industries from fully recovering at MarketCrash.news.

Sources include:




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