Poll: Restaurant owners torn between raising prices and staying in business
The results of the latest Ohio Restaurant Association show continued challenges for Ohio’s restaurant industry.
More than one-third of restaurant owners who answered the latest Ohio Restaurant Association Business Impact Poll reported more than a 15% increase in food prices, up 8% since June. Thirty-eight percent of those taking part in the poll said they are seeing increases between 11-15%.
Forty percent of the owners and operators reported supply costs are up 6-10%.
“Independent restaurants are not pocketing gobs of profit, rather most are less than 14 days away from insolvency, cannot pay their rent, cannot find staff to operate and cannot keep up with inflation,” said Laurie Torres, owner of Mallorca in Cleveland. “Many owners I know have not taken a personal paycheck in months, and some long-term staples in the community are considering closing altogether.”
According to research from the National Restaurant Association, restaurants with annual sales of $900,000 would need to increase total sales 12.3% above 2019 sales volume to cover additional costs and not suffer a loss.
To maintain profitability, restaurants would need to increase 17.3% above 2019’s sales volume, according to the association. However, in the last 12 months, restaurants have only increased menu prices 8.5% on average and in inflation-adjusted terms, average monthly sales during July through September were $1 billion lower than they were from April through June.
"Local restaurant owners across Ohio are extremely dedicated to their communities,” said John Barker, president and CEO of the ORA. “They don’t want to jeopardize their relationships with customers and are working to keep prices as low as possible. However, they’re put into an impossible situation – without raising prices nominally, they may not continue to operate.”
In Ohio, 54% of respondents to the most recent ORA Business Impact Poll are uncertain about the success of their business and 16% are not confident their business will succeed through 2022.
Nationally, only 8% of owners/operators expect economic conditions to improve in six months – the lowest reading in the 20-year history of the National Restaurant Association monthly survey.