The Shocking Restaurant Statistic That Highlights Inflation Struggles
Eateries have faced turbulent times over the past few years as the COVID-19 pandemic forced many establishments to limit how they could serve their guests and with lockdowns preventing indoor dining. The restaurant industry has also seen a significant labor shortage during that time. Many businesses resorted to "temporary" layoffs to help cope with the COVID-related restrictions, but 38% of those workers had no interest in returning to the service industry (via Food & Wine).
A labor shortage is just one of the struggles restaurant owners face, however, as they now contend with rising inflation costs. Joseph Charles, the owner of Rock City Pizza, told NPR that rising gas costs have more than doubled the amount of money he needs to pay his weekend delivery drivers while increases in food prices have made him shrink the restaurant's menu rather than pass the increasing costs to his customers. But food and gas costs aren't the only expenses on the rise for restaurants, as illustrated by a particularly jarring stat.
Restaurants have seriously struggled with rising rent costs
According to Alignable, 41% of small restaurants were unable to make rent in May, a figure that is no doubt impacted by the fact that the cost of rent has gone up for 52% of small businesses. While shocking, this unfortunate situation wasn't unforeseeable or even new. In 2021, Alignable revealed that a jarring 45% of restaurants lacked the funds to cover their August rent. And as early as June 2020, the Washington Post warned that rent defaults could plague businesses in the age of COVID.
While inflation is driving up the expenses restaurant owners have to cover, it's also impacting customers' willingness to buy meals at full price. Laura Rae Dicky, CEO of the restaurant chain Dickey's Barbeque Pit, told Fox News that she's noticed "recession-oriented behavior" from customers as sales drop. The number of customers using coupons at Dickey's Barbeque Pit jumped by over 20%. And Forbes notes that consumers spend less money when gas prices are above $4 a gallon and that dining out is one of the first cuts money-conscious consumers make.
Is there an end in sight? We can't predict the future, but according to personal finance magazine Kiplinger, inflation rates are expected to ease over the course of the year. So hopefully, the restaurant industry will finally catch a well-deserved break.