MRLA: 87% of Michigan Restaurants Are Understaffed

The hospitality industry is continuing to feel the impact of COVID-19.Mlra 10 4 21

On Monday, the Michigan Restaurant and Lodging Association released state-specific results of a nationwide restaurant operator survey.

The survey shows a significant slow down in a rebound for the hospitality industry.

The key takeaways from the survey include:

    • The Delta variant is taking its toll: 58% of operators say their restaurant experienced a decline in customer demand for indoor on-premises dining in recent weeks.
    • 49% of operators say their restaurant is less profitable now than it was three months ago.
    • 83% of operators say their total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak.
    • 17% of operators think it will be 7 to 12 months before business conditions return to normal for their restaurant, while 55% think it will be more than a year.

“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.

“The impact of this virus and lack of state and federal support are still threatening the viability of our community restaurants.”

COVID-19 Restaurant Impact Survey – September 2021: Michigan

Restaurant Business Conditions

  • Although restaurant sales improved from the early months of the pandemic, business conditions remain far from normal for many Michigan restaurants. Overall, 65% of Michigan operators say their total sales volume in August 2021 was higher than it was in August 2020. Only 22% of operators reported a same-store sales decline between August 2020 and August 2021.
  • However, when compared with August 2019 pre-pandemic levels, a majority of operators say their sales were lower in August 2021. 61% of Michigan operators say their sales volume in August 2021 was lower than it was in August 2019. Only 29% reported higher sales compared to August 2019.
  • Business conditions deteriorated in recent months, according to restaurant operators. 43% of Michigan operators say business conditions for their restaurant are worse now than they were 3 months ago. Only 15% say business conditions improved during the last 3 months.
  • The delta variant negatively impacted the restaurant industry in recent weeks. 58% of operators say their restaurant experienced a decline in customer demand for indoor on-premises dining in recent weeks, as a result of the increase in coronavirus cases due to the delta variant.
  • Most Michigan restaurant operators do not expect a return to normal business conditions any time soon. 17% of operators think it will be 7-12 months before business conditions return to normal for their restaurant, while 55% think it will be more than a year. An additional 17% of operators say business conditions will never return to normal for their restaurant.

Restaurant Jobs

  • Although the industry added back many of the jobs lost during the pandemic, a majority of restaurants remain understaffed. 87% of Michigan operators say their restaurant currently does not have enough employees to support its existing customer demand.
  • Among restaurants that are currently understaffed, 89% of operators say their restaurant is more than 10% below necessary staffing levels. 54% say they are currently more than 20% below necessary staffing levels.

Costs Are Up – Profitability is Down

  • 90% of operators say their total food costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 2% say their food costs make up a smaller proportion of sales.
  • 83% of operators say their total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 10% of operators say their labor costs declined as a percent of sales.
  • 69% of operators say their total occupancy costs are higher than they were prior to the COVID-19 outbreak. Only 3% say their total occupancy costs are lower.
  • 79% of Michigan operators say their profit margin is lower than it was prior to the COVID-19 outbreak. Only 7% of operators say their profit margin is higher.
  • Many Michigan operators also reported a deterioration of profitability during the last few months. 49% of operators say their restaurant is less profitable now than it was 3 months ago. Only 12% of operators say their restaurant is more profitable now than it was 3 months ago.

Source: National Restaurant Association, national survey of 4,000 restaurant operators conducted September 7-15, 2021

Categories: Coronavirus