• Wed. Oct 5th, 2022

How is the restaurant industry doing these days?

ByStephanie M. Akbar

Sep 9, 2022

A few new reports on the state of the restaurant industry show mixed results.

OpenTable, the booking-reservation platform, says more people are dining now than before the pandemic. Meanwhile, the most recent National Restaurant Association member survey indicates that profitability is down.

Ronald Sofranko owns a dozen restaurants, mostly in Pennsylvania. And he noticed a mood change among the diners.

“They don’t smile as much as they used to,” he said. “You know, it’s like sometimes you have the customer irritated. You know, you just can’t make them happy.

But he’s not letting the occasional grumbling ruin his prospects because, he said, business is good again. Foot traffic at its restaurants has returned to pre-pandemic levels. Alcohol sales are also on the rise.

“We have this huge pent-up demand. And the consumer, he wants to go out, he wants to have fun. They want to go back to the good old days, if you want,” Sofranko said.

OK, so people are happy to go out, but not necessarily happy while they went out ? These conflicting feelings could have a lot to do with the current cost of restaurant meals. All of this puts business owners on edge.

“The consumer has a lot of choice, and if their last restaurant experience, whatever price they paid and whatever value they received during that restaurant experience, if that doesn’t meet his expectations, he’s quick enough to vote with his feet,” said Hudson Riehle of the National Restaurant Association.

This is why restaurants are reluctant to raise their prices as much as they need to. The latest consumer price index showed that the cost of food outside the home increased by more than 7.5% over the previous 12 months. That’s a smaller increase than the cost of groceries, which means restaurant owners are picking up some of the cost and making less money.

Laurie Torres owns Mallorca, a Spanish and Portuguese restaurant in downtown Cleveland. “I joked a few weeks ago that I was going to do all the menu market price,” she said.

For example, if she increased the price of a dish from $14 one day to $18 the next. In fact, it raised its prices once this year, by about 7%. It also doesn’t offer its usual promotions as they would have to be ridiculously expensive to make a profit.

“I know a lot of my customers are like, ‘Where’s the bar?'” Torres said. “And I’m just like, right now, I just can’t do the bar.”

For now, Mallorcan salmon and tilapia will have to do.

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