Earlier this week, the National Restaurant Association released a new survey of the state of the industry. The conclusions are bleak – deteriorating business conditions are impacting operators’ outlook to the point that they state a recovery from the pandemic will be prolonged well into 2022. Overall, a majority of full-service and limited-service operators say business conditions are worse now than three months ago. These findings come on the heels of rising food and supply costs, a well-documented labor shortage, nearly $300 billion in lost sales, and debilitating debt that continues to mount.
Here are the COVID-19 Restaurant Impact Survey results for South Carolina from September 2021:
Restaurant Business Conditions
Although restaurant sales improved from the early months of the pandemic, business conditions remain far from normal for many South Carolina restaurants. Overall, 62% of South Carolina operators say their total sales volume in August 2021 was higher than it was in August 2020. Only 24% 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. 51% of South Carolina operators say their sales volume in August 2021 was lower than it was in August 2019. Only 30% reported higher sales compared to August 2019.
Business conditions deteriorated in recent months, according to restaurant operators. 52% of South Carolina operators say business conditions for their restaurant are worse now than they were 3 months ago. Only 10% say business conditions improved during the last 3 months.
The delta variant negatively impacted the restaurant industry in recent weeks. 74% 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 South Carolina restaurant operators do not expect a return to normal business conditions any time soon. 22% of operators think it will be 7-12 months before business conditions return to normal for their restaurant, while 28% think it will be more than a year. An additional 26% 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. 69% of South Carolina operators say their restaurant currently does not have enough employees to support its existing customer demand.
Among restaurants that are currently understaffed, 72% of operators say their restaurant is more than 10% below necessary staffing levels. 32% say they are currently more than 20% below necessary staffing levels.
Costs Are Up – Profitability is Down
87% of operators say their total food costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 4% say their food costs make up a smaller proportion of sales.
76% of operators say their total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 6% of operators say their labor costs declined as a percent of sales.
59% of operators say their total occupancy costs are higher than they were prior to the COVID-19 outbreak. Only 9% say their total occupancy costs are lower.
80% of South Carolina operators say their profit margin is lower than it was prior to the COVID-19 outbreak. Only 8% of operators say their profit margin is higher.
Many South Carolina operators also reported a deterioration of profitability during the last few months. 62% of operators say their restaurant is less profitable now than it was 3 months ago. Only 5% 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
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