MICHIGAN — Restaurants continue to work through significant challenges like high operational costs, low profitability, and unfilled positions according to a recent nationwide survey.
The Michigan Restaurant & Lodging Association, which released state-specific results from the national study conducted in September, says it suggests a “significant slowing down of any sort of rebound.”
“As we approach Michigan’s fall and winter seasons and see consumer trends move away from in-person dining due to colder weather outdoors and concerns about the Delta variant, the recoil impact to the restaurant industry will be harsh, swift and very concerning,” said Justin Winslow, MRLA president & CEO. “Less than one in three operators are doing better than they were pre-pandemic with business conditions being worse now than they were three months ago. These trend lines tell us that we are moving away from a desperately-needed resurgence as we approach the winter season.”
According to MRLA, 87 percent of operators reported being understaffed, with 54 percent more than 20 percent below necessary levels. Compared to pre-pandemic prices, 90 percent had increased total food costs as a percent of sales. Other operational costs, like labor and rent, were also up. Lower profit margins were noted by 79 percent of restaurants.
The more transmissible Delta variant is listed as a possible reason for the trends as diners declined to eat in indoor settings where COVID-19 is more likely to spread.
“Be kind and be patient,” said Tim Fellows, who owns Pietro’s Italian Restaurant in Grand Rapids.
Fellows says while profitability is better than in 2019, his restaurant faces the same issues.
“This week, our order from a food vendor, 20 items were cut from our menu just because it’s not available, not in stock,” said Fellows. “It’s disheartening. It’s not the way we have been running our business for years, so it’s been very, very difficult and it’s been wearing thing on a lot of us.”
It’s much of the same for Rockford Brewing Company.
Matt Valleau, general manager, said the restaurant is short 4 to 10 employees and pays 25 to 35 percent more for some of their staple ingredients, but in some cases it can be much higher.
“A case of chicken wings for us, which is one of our most popular dishes, probably throughout early 2020 would’ve ranged between $50, $55, and $65, $70 a case and we were used to that fluctuation,” Valleau said. “Right now we’re paying anywhere between $155 and $165 a case.”
The restaurant industry is increasing pay and providing benefits to attract employees. However, services may still be slower. In some cases, menu items may be taken off or a few dollars higher as restaurants work through situations out of their control.
Workers say they’re relying on people to be understanding. Of the Michigan restaurants surveyed, 55 percent do not expect business conditions to return to normal for more than a year.
“We continue to be used to having to adapt and change what we’re doing and how we’re doing things,” Valleau said.