Press Release
FOR IMMEDIATE RELEASE
August 25, 2022
Media Contacts:
|
Emily Daunt
Michigan Restaurant & Lodging Association (517) 377-3933 |
Michael Odom or Adam O’Connor
Marx Layne & Company (734) 259-9060 Odom’s cell (248) 321-0586 O’Connor’s cell |
Michigan Restaurant Operators Endure Weaker Business Conditions Amidst
Uncertain Operating Future
New MRLA survey data finds the tenuous economy is disrupting service across the industry just as a recent court ruling could devastate its future
Uncertain Operating Future
New MRLA survey data finds the tenuous economy is disrupting service across the industry just as a recent court ruling could devastate its future
LANSING, MICH. – The Michigan Restaurant & Lodging Association (MRLA) today released state-specific results of a recent nationwide restaurant business conditions survey. Key findings reveal how current economic conditions and soaring costs are limiting restaurant operations and further disrupting the industry in Michigan.
The concerning data comes amidst an uncertain time for Michigan restaurants, particularly full-service restaurants that employ tipped servers. A recent Court of Claims ruling would, if upheld, make Michigan one of just eight states to operate without a tipped minimum wage. The challenge for operators is exacerbated in that it would happen suddenly, without time to transition, increasing their labor costs 156 percent overnight.
“The restaurant industry has been ever-resilient over the last two and a half years, repeatedly reinventing itself to adapt to unprecedented challenges that continue to this day,” said MRLA President and CEO Justin Winslow. “The clearest takeaway from this data is that the industry remains extraordinarily vulnerable and that another external shock, such as the immediate loss of the tip credit would have catastrophic consequences.”
Survey highlights include:
“Thousands of independent restaurants struggle to operate profitably right now, and many remain saddled with debt from the pandemic, so their ability to pivot to a new business model that would increase their cost of business 156% overnight simply does not exist. Tens of thousands of jobs would be lost and hundreds, perhaps more, restaurants would be forced to close their doors,” Winslow said.
A strong majority of Michigan restaurants are still understaffed and actively seeking to fill positions — even as they face building headwinds of a slowing economy.
The survey was conducted July 14 – August 15 by the National Restaurant Association (NRA) and included responses from 4,200 restaurant operators nationally. The above data reflects Michigan-specific responses extracted from the NRA survey.
The concerning data comes amidst an uncertain time for Michigan restaurants, particularly full-service restaurants that employ tipped servers. A recent Court of Claims ruling would, if upheld, make Michigan one of just eight states to operate without a tipped minimum wage. The challenge for operators is exacerbated in that it would happen suddenly, without time to transition, increasing their labor costs 156 percent overnight.
“The restaurant industry has been ever-resilient over the last two and a half years, repeatedly reinventing itself to adapt to unprecedented challenges that continue to this day,” said MRLA President and CEO Justin Winslow. “The clearest takeaway from this data is that the industry remains extraordinarily vulnerable and that another external shock, such as the immediate loss of the tip credit would have catastrophic consequences.”
Survey highlights include:
- 91 percent of operators say their other operating costs (supplies, G&A, etc.) are higher than 2019.
- 90 percent of operators say their restaurant is less profitable than it was in 2019.
- 89 percent of operators said their total food and beverage costs are higher than 2019 and across the board, many other costs are up.
- 67 percent of operators say their total utility costs are higher than 2019.
- 57 percent of operators say their total occupancy costs are higher than 2019.
- 42 percent of operators say business conditions for their restaurant are worse now than they were three months ago.
“Thousands of independent restaurants struggle to operate profitably right now, and many remain saddled with debt from the pandemic, so their ability to pivot to a new business model that would increase their cost of business 156% overnight simply does not exist. Tens of thousands of jobs would be lost and hundreds, perhaps more, restaurants would be forced to close their doors,” Winslow said.
A strong majority of Michigan restaurants are still understaffed and actively seeking to fill positions — even as they face building headwinds of a slowing economy.
- 93 percent of operators say their restaurant currently has job openings that are difficult to fill.
- 92 percent of operators say they will likely hire additional employees during the next six months.
- 73 percent of Michigan operators report not having enough employees to support customer demand.
- 67 percent of full-service operators say their restaurant is currently more than 10 percent below necessary staffing levels.
- 20 percent of limited-service operators say their restaurant is more than 20 percent below required staffing levels.
The survey was conducted July 14 – August 15 by the National Restaurant Association (NRA) and included responses from 4,200 restaurant operators nationally. The above data reflects Michigan-specific responses extracted from the NRA survey.
About the Michigan Restaurant & Lodging Association
Michigan Restaurant & Lodging Association (MRLA) is the recognized leader of Michigan's hospitality industry, providing essential services to the foodservice and lodging community. Founded in 1921 as the Michigan Restaurant Association and now known as the MRLA, the Association represents over 5,000 Michigan foodservice and lodging establishments. The industry plays an integral role in Michigan's economy, employing more than 595,000 people and creating nearly $40 billion in annual sales. For more information, visit www.mrla.org and www.detroitrla.org.
Michigan Restaurant & Lodging Association (MRLA) is the recognized leader of Michigan's hospitality industry, providing essential services to the foodservice and lodging community. Founded in 1921 as the Michigan Restaurant Association and now known as the MRLA, the Association represents over 5,000 Michigan foodservice and lodging establishments. The industry plays an integral role in Michigan's economy, employing more than 595,000 people and creating nearly $40 billion in annual sales. For more information, visit www.mrla.org and www.detroitrla.org.
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