Some restaurateurs are struggling despite food service sales growth
Some restaurateurs are struggling despite food service sales growth
The services summer we’ve been having looks like it’s been good to bars and restaurants: New retail sales figures for July show 12% sales growth at food services and drinking places from last year. But as you know, topline economic data doesn’t always paint the full picture from Main Street.
So I talked to restaurant owners in Colorado, Texas and Minnesota about summer sales. Their responses were not exactly enthusiastic.
“Our profit margin is less than half what it used to be pre-pandemic,” said Caroline Glover, owner and chef at the restaurant Annette in Aurora, Colorado.
“The profit margin is less because of the inflation and high costs,” said Omer Yousafzai, a Houston-area entrepreneur who owns three Afghan restaurants and four halal grocery stores.
“We are not back to 2019 volumes,” said Stephanie Shimp with the Blue Plate Restaurant Co. in Minnesota.
The National Restaurant Association’s Hudson Riehle said even though restaurants made record sales in 2023, “the industry is extremely fragmented.”
While takeout, delivery, drive through and curbside sales are above pre-pandemic levels, “conversely, on-site restaurant traffic remains down,” he said.
Riehle said the pandemic has shifted where people eat as many folks moved away from urban areas and stopped going into the office.
Shimp has seen this play out at her chain of diners in the Twin Cities.
“We’re slow. And we’re particularly affected more in our city stores than in our suburban locations,” she said.
Compared to pre-pandemic numbers, Tracy Vaught in Houston said sales at her five restaurants are down about 22%.
“Lunches and happy hours got very soft, because people are working from home, and when you work from home, you just make a sandwich,” Vaught said.
At the same time, she said costs have continued to rise for food, labor, linen — even credit card fees. Her restaurants are still not back to opening seven nights a week.
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