The intimate nature of the restaurant business — both for diners as well as for staff — made it the industry that was (arguably) the hardest hit during the COVID crisis. The mitigation measures dining establishments were forced to impose, like social distancing and use of face masks, created massive supply chain and operational challenges for all involved — many of which continue to this day.
So much so, restaurants of all sizes and types across the country are dramatically reducing the hours they’re open for business, based on the results of a newly released survey by market research firm Datassential.
Relative to 2019, the typical restaurant in the United States is open for an average of 6.5 fewer hours per week the poll showed. That’s a decline of over 7%. In certain states, however, restaurants have chopped their hours of operation more substantially with Vermont leading the way among states at more than 11 hours fewer per week and D.C. open for 12.5 fewer hours.
Since much of the industry operates on the slimmest of margins, restaurants try to make the most out of every hour that they’re open, but a toxic stew of adverse supply chain conditions has forced their hand. These factors include higher food costs, overhead-related expenses (e.g. electricity, rent, etc.) and higher gas prices, a pain point for eateries that rely on delivery as one of their selling methods.
Staff shortages weighing on restaurants
For most, however, the main issue is related to staff: They simply don’t have enough people who are ready and willing to work. It’s gotten so bad, some franchises locations are closing on weekends, which typically comprise the days of the week why revenue is highest. According to a poll by the National Restaurant Association, close to two-thirds of restaurant owners surveyed said they do not have enough employees on hand to effectively serve all of their customers in a timely fashion. Indeed, 1 in 5 full-service operations say they’re understaffed by 20% or more.
Jason Birchard, co-owner of a restaurant based in Manhattan that specializes in Ukrainian cuisine, told CNBC that he’s having troubles with both recruitment and retention.
The restaurant segment in the Big Apple has been particularly hard hit. Datassential noted that of the 15 zip codes with the largest weekly decline in operating hours, 12 were in New York City.
Wage growth can help with recruitment and retention, but with rising food costs taking up even more of their budgets — nearly 90% say they’re paying more for ingredients the National Restaurant Association poll found — doing so can compromise their profitability.
In addition to the worker shortage, other contributing factors to the reduction in hours include fewer people eating out, less traveling to and from work due to the growth in telecommuting and the ongoing impact the “Covid hangover” is having on social behaviors.
