COVID delta variant reversing recovery in restaurant industry, survey says

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A majority of restaurant operators claim business conditions are worse today than they were three months ago due to the spread of the delta variant of the coronavirus, according to a National Restaurant Association survey. 

About 80% of operators say they have seen a decline in customer demand, specifically for indoor and on-premises dining, in recent weeks as a result of the variant, according to the survey of 4,000 operators. 

However, even with declining demand, about 71% of operators say they still don't have enough staff to handle their current customers despite efforts to bring back many jobs that were lost due to the pandemic. 

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Eateries are also facing rising operating costs all while profitability is still down. 

Nearly all operators reported paying more for food and about 84% say they have higher labor costs. More than 60% are paying higher occupancy costs, according to the survey. 

A restaurant outside 888 Seventh Avenue, the building that housed the Archegos offices, in the Midtown neighborhood of New York, U.S., on Sunday, Aug. 8, 2021.  (Jeenah Moon/Bloomberg via Getty Images / Getty Images)

However, 85% of operators say they are facing smaller margins compared to pre-pandemic times. 

In fact, more than half of the operators surveyed said that their sales volume was down in August compared to the same month in 2019. August is historically one of the busiest months for the industry, according to the report.  

On top of that, 95% of operators say they have faced supply delays and shortages for food or beverage items over the past three months. 

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Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, said the figures show that the industry's "recovery is officially moving in reverse."

"The lingering effects of the delta variant are a further drag on an industry struggling with rising costs and falling revenue," Kennedy said. 

Kennedy argued that while the association supports many of the goals in the Build Back Better Act, "the legislation is too large and too expensive a check for small businesses to take on" and will in turn, "only prevent progress in turning the tide of recovery."

The association penned a letter to Congress concerning the proposed legislation and its impact on the already "deteriorating business conditions." 

"The restaurant industry would be one of many small businesses that would see their tax liabilities increase as a result of the BBBA," the letter reads. "Congress has done admirable work to provide a lifeboat for restaurants during the pandemic, and should not reverse these efforts with a multitude of higher taxes."

Abut 44% of operators already fear that it will be more than a year before business conditions return to normal. However, nearly 20% don't think those conditions will ever return. 

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