NRA: 78% of operators report a decline in catering activity

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Dive brief:

  • Seventy-eight percent of restaurant owners report declining customer demand for indoor dining in recent weeks due to increased cases of delta-variant coronavirus, according to a survey by the National Restaurant Association Research Group of 4,000 operators. The survey was conducted between September 7 and September 15, 2021.
  • Sixty-three percent of operators said that in August – historically one of the busiest months of the year for restaurants – the volume was lower than in August 2019, the survey found.
  • The conclusions of this report have been included in a letter the organization sent to congressional leaders on Wednesday. In the letter, the NRA cautioned against harmful provisions of the Build Back Better Act, including certain tax changes, which could affect the restaurant industry. The NRA also urged Congress to replenish the Restaurant Revitalization Fund.

Dive overview:

Restaurant sales in the food service industry are negative, despite two-year average check growth in the week ending September 19, 2021, which is the highest Black box intelligence never recorded. This crisis indicates that the impact of the pandemic on the restaurant industry is far from over.

Forty-four percent of operators said they still had not returned to full indoor catering capacity, according to the NRA survey. These findings reiterate the organization’s previous report on Changing Customer Behavior, where six in 10 diners said they had changed their dining habits following a spike in coronavirus cases in the United States.

A majority of full-service and limited-service operators said their trading conditions were worse than three months ago. Forty-four percent said they think it will take more than a year before normal trading conditions are seen, and 19% don’t expect conditions to return to normal, the survey found September of the NRA.

“Our nation’s restaurant recovery is officially reversed,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, said in a press release. “The lingering effects of the delta variant are a further drag on an industry struggling with rising costs and falling revenues.”

Operators face rising costs across the board, with 91% paying more for food, 84% paying more for labor, and 63% paying more for occupancy costs. At the same time, profitability has not increased and 85% of operators now have lower margins than before the pandemic.

Prices for chicken wings have skyrocketed, for example. An operator in Seattle shut down his business and instead sold food and drink at music festivals at higher prices after finding out he was losing money on every box of wings his restaurant sold.

Shortages also have a dramatic impact on the ability of operators to be fully functional. Seventy-eight percent of operators say their restaurants do not have enough staff to meet restaurant demand, and many operators continue to reduce hours and capacity limits. A majority of operators (95%) also said they had experienced delays or shortages of food and drink products in the past three months, and 75% said had to change their menus because of the shortages.

With the BBBA under review, the NRA continues to urge Congress to further support the restaurant industry and has said it opposes various aspects of this bill, including the section cap. 199A of the Small Business Tax Deduction, which “would deprive small businesses earning more than $ 400,000 or $ 500,000 in income of the ability to preserve more of their working capital.” The organization also opposes the repeal of the increased base, which makes death a taxable event for a family business, an increase in the corporate tax rate and additional fines for violations of the NLRA, which would allow fines of $ 50,000 to $ 100,000 for each violation.

“We support many of the goals of the Build Back Better Act, but the legislation is too big a check and too expensive for small businesses,” Kennedy said. “Restaurants still need help today and flooding them with costly new obligations will only hinder progress in turning the tide of the recovery.”


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