Survey: Slowdown Coming for Michigan Restaurants and Lodges

The Michigan Restaurant and Lodging Association, which represents more than 5,000 foodservice and lodging establishments, today released state-specific results of a recent nationwide restaurant operator survey that indicated a significant slowdown is projected in the hospitality sector rebound.
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The MRLA released state-specific results of a nationwide survey that indicates a projected significant slowdown is coming in the hospitality sector’s recovery. // Stock Photo

The Michigan Restaurant and Lodging Association, which represents more than 5,000 foodservice and lodging establishments, today released state-specific results of a recent nationwide restaurant operator survey that indicated a significant slowdown is projected in the hospitality sector 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,” says Justin Winslow, president and CEO of the MLRA.

“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.”

Survey highlights include:

  • Twenty-two percent of operators reported a same-store sales decline between August 2020 and August 2021.
  • Sixty-one percent of Michigan operators say their sales volume in August 2021 was lower than it was in August 2019. Twenty-nine percent reported higher sales compared to August 2019.
  • Many Michigan operators also reported a deterioration of profitability during the past few months. Forty-nine percent of operators say their restaurant is less profitable now than it was three months ago. Twelve percent of operators say their restaurant is more profitable now than it was three months ago.
  • Forty-three percent of Michigan operators say business conditions for their restaurant are worse now than they were three months ago. Fifteen percent say business conditions improved during the past three months.
  • The Delta variant negatively impacted the restaurant industry in recent weeks. Fifty-eight percent 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.
  • Seventeen percent of operators think it will be 7 to 12 months before business conditions return to normal for their restaurant, while 55 percent think it will be more than a year. An additional 17 percent of operators say business conditions will never return to normal for their restaurant.
  • Eighty-seven percent of Michigan operators say their restaurant currently does not have enough employees to support its existing customer demand.
  • Fifty-four percent of operators that are understaffed say they are currently more than 20 percent below necessary staffing levels with 89 percent of operators saying they are more than 10 percent below necessary staffing levels.
  • Ninety percent of operators say their total food costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Two percent say their food costs make up a smaller proportion of sales.
  • Eighty-three percent of operators say their total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Ten percent of operators say their labor costs declined as a percent of sales.

“It’s important to remember as we return back to our offices, our family gatherings, and other business as usual settings, that the impact of this virus and lack of state and federal support are still threatening the viability of our community restaurants,” says Winslow.

The survey was conducted September 7 – 15 by the National Restaurant Association (NRA) and included responses from 4,000 restaurant operators nationally. The above data reflects Michigan-specific responses extracted from the NRA survey — 131 Michigan operators were represented in the survey results.

Founded in 1921, MRLA members employ more than 595,000 people and create nearly $40 billion in annual sales. For more information, visit www.mrla.org and www.detroitrla.org.

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