Oct. 4, 2021

Economic Survey Finds Restaurants Still Struggle as Costs Increase

The National Restaurant Association sent a letter to congressional leaders opposing the tax increases and changes to the National Labor Relations Act in the proposed $3.5 trillion reconciliation bill and asking to replenish the Restaurant Revitalization Fund.

If passed, the Build Back Better Act would make major investments across several sectors with the intention of lowering childcare and healthcare costs, advancing clean energy and creating more workforce training, among other priorities of the Biden administration. However, the historic cost of the bill and the expectation it would be paid for by raising taxes on businesses and wealthy individuals has created strong opposition from the business community. “The restaurant industry would be one of many small businesses that would see their tax liabilities increase as a result of the BBBA,” the National Restaurant Association said. “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.”

A new national survey of the economic condition of restaurant operators found that:

  • 78 percent of operators say their restaurant experienced a decline in customer demand for indoor, on-premises dining in recent weeks because of the delta variant spike
  • 63 percent of operators reported a lower sales volume in August 2021 compared to August 2019
  • Costs are up, with 91 percent of operators paying more for food; 85 percent paying more for labor; and 63 percent paying higher occupancy costs
  • 78 percent of operators said their restaurant doesn’t have enough employees to support current customer demand
  • 95 percent of operators experienced supply delays or shortages of key food or beverage items during the past three months

Considering those continued struggles, the National Restaurant Association said Congress should not reverse its efforts to support the restaurant industry with higher taxes. Further, the association urged Congress to replenish the Restaurant Revitalization Fund, which provided economic assistance to restaurants, bars and other foodservice businesses impacted by COVID-19. According to the association, two-thirds of eligible restaurants that previously applied for the RRF did not receive any funds and remain financially unstable, with eligible pandemic losses of more than $43 billion.

To read the full letter to Congress, please click here.