COLUMBUS – The Ohio Restaurant Association (ORA) Business Impact Poll results once again show continued challenges for Ohio’s restaurant industry.
Food costs continue to increase dramatically as 34% of respondents report more than a 15% increase, up 8% since June, and 38% are seeing increases between 11-15%. Additionally, 40% of owners and operators report 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 an 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. However, in the last 12 months, restaurants have only increased menu prices 8.5% on average and in inflation-adjusted terms, average monthly sales in the third quarter (July-September) were $1 billion lower than they were during the second quarter (April-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.
