Survey: Omicron variant hit restaurant industry hard

The latest surge of COVID-19 cases caused by the Omicron variant has once again hit the restaurant industry hard.

The New Jersey Restaurant & Hospitality Association on Monday released new data from a survey that highlights the detrimental impact Omicron has had on it so far. It also demonstrates the positive impact the Restaurant Revitalization Fund had on the New Jersey industry.

According to National Restaurant Association analysis, the first round of RRF funding saved more than 30,000 New Jersey jobs and helped 100% of recipients of a grant stay in business.

Still, the survey of 4,200 restaurant operators, conducted between Jan. 6-18, found that nearly 60% of restaurant operators that did not receive RRF grants feel it’s unlikely that they will stay in business beyond the pandemic without a grant.

And 100% of restaurant operators that applied for an RRF grant, but did not receive funding, said a future grant would enable them to retain or hire back employees that would otherwise have been temporarily or permanently laid off.

Dana Lancellotti. (File photo)

“This highlights how impactful RRF replenishment would be. The National Restaurant Association estimates indicate that full replenishment of the RRF will save an additional 45,000 restaurant jobs,” New Jersey Restaurant and Hospitality Association CEO and President Dana Lancellotti said.

100% of RRF recipients said the grant helped them pay expenses or debt that had accumulated since the beginning of the COVID-19 outbreak in March 2020, and 85% of RRF recipients said the grant was not sufficient to cover all of their lost sales since the beginning of the COVID-19 outbreak in March 2020.

Forced to adapt to deteriorating consumer confidence, restaurants reduced hours/days of operation, cut seating capacity and shut down, pivoting to off-premises dining, with the end result being lower sales volumes in 2021 than in 2019.

“As a result, 80% of operators say business conditions for their restaurant are worse now than they were three months ago,” Lancellotti said. “Only 2% say business conditions improved during the last three months. This was on top of the cumulative effects of nearly two years of pandemic-induced challenges.”

According to the survey:

  • 93% of restaurants experienced a decline in customer demand for indoor on-premises dining in because of the Omicron variant;
  • 70% say their restaurant is less profitable now than it was before the pandemic;
  • 68% of operators say their restaurant accumulated additional debt since the beginning of the COVID-19 outbreak in March 2020;
  • 79% of operators say their restaurant fell behind on expenses since the beginning of the COVID-19 outbreak in March 2020.

“The RRF was a critical lifeline to many, but far more are still desperately looking for support amidst continued economic uncertainty. The decisions Congress will make in the coming weeks will be critical to the future of our New Jersey restaurant industry,” Lancellotti said.