The Arkansas Hospitality Association surveyed members and non-members the last two weeks of November and released the results today. The pandemic has taken a toll, of course, and most expect little improvement soon.
The AHA release:
Restaurant Business Conditions
- Consumer spending in Arkansas restaurants remained well below normal levels in October. Eighty-four percent of Arkansas restaurant operators say their total dollar sales volume in October was lower than it was in October 2019. Overall, sales were down 28% on average.
- Most restaurant operators do not expect business conditions to improve in the coming months. Sixty-four percent of Arkansas operators expect their sales to decrease from current levels during the next 3 months. Only 7% of operators expect their sales will increase from current levels during the next 3 months.
- Even though sales were significantly lower for most restaurants, it doesn’t mean their costs also fell proportionally. Seventy-four percent of Arkansas operators say their restaurant’s total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 15% of operators say their labor costs are lower, as a percent of sales.
- With costs rising and sales falling, the result is added damage to the bottom line. Eighty-five percent of Arkansas operators say their restaurant’s profit margin is lower than it was prior to the COVID-19 outbreak.
- With business conditions deteriorating, more federal government assistance is critical for the survival of many restaurants. Thirty-six percent of Arkansas operators say it is unlikely their restaurant will still be in business six months from now, if there are no additional relief packages from the federal government.
- Absent additional government assistance, one option is to close the restaurant until business conditions improve. Thirty-one percent of Arkansas operators say they are considering temporarily closing their restaurant until the COVID-19 pandemic passes
- Although many restaurants added back employees after the initial lockdowns, overall staffing levels remain well below normal. Seventy-nine percent of Arkansas operators say their current staffing level is lower than what it would normally be in the absence of COVID-19. Thirty percent of restaurants are currently more than 20% below normal staffing levels.
- With business conditions deteriorating, many restaurant operators are anticipating additional layoffs in the coming months. Thirty-eight percent of Arkansas operators expect their staffing levels to decline during the next 3 months. Only 2% of operators expect their staffing levels will rise during the next 3 months.
Speaking of assistance: Rent, unemployment assistance, food, child care and more are badly needed, maybe more so, for those put out of work on account or the restaurant downturns.