---
title: "Restaurant Operators Face Weaker Business Conditions and Growing Economic Pessimism"
url: https://burnaze.com/article/f685bf73-7710-4796-bc55-c3c032e49957
source: "Franchising.com"
original_url: https://www.franchising.com/articles/restaurant_operators_face_weaker_business_conditions_and_growing_economic_p.html
author: "Kerry Pipes"
category: "Restaurants"
industry: "Restaurants"
topics: ["Finance & M&A"]
published: 2022-08-23T09:00:00.000Z
modified: 2026-11-01T01:10:15.521Z
image: https://imgs.franchising.com/art/articles/6995_plate.jpg
---

# Restaurant Operators Face Weaker Business Conditions and Growing Economic Pessimism

**TL;DR:** Restaurant operators face weaker business conditions and growing economic pessimism, with 46% of operators saying business conditions are worse now than three months ago. Approximately 95% of a restaurant's sales dollars go to food, labor, and operating costs, which have increased significantly over the last 12 months.

*By Kerry Pipes, originally published in Franchising.com on 2022-08-23. [Read the original](https://www.franchising.com/articles/restaurant_operators_face_weaker_business_conditions_and_growing_economic_p.html).*

## Story

The costs of goods for restaurateurs are going up and 46% of operators say business conditions are worse now than they were three months ago, according to a new survey released by the National Restaurant Association. “Running a restaurant is a balancing act requiring adaptation and innovation, two areas where restaurateurs excel,” said Michelle Korsmo, President & CEO of the National Restaurant Association. “And while operators are more pessimistic about the economy, they are working hard to continue to provide quality and value for customers.”

Approximately 95% of a restaurant’s sales dollars go to food, labor, and operating costs. While wholesale food prices have increased 16.3% in the last 12 months, menu prices have only risen 7.

6% in the same period, and only 16% of operators report adding fees or surcharges to customer checks. As a result, 85% of operators say their restaurant is less profitable than it was in 2019. 88% of operators said their total food and beverage costs are higher than 2019 and across the board, many other costs are up.

65% of operators say their total occupancy costs are higher than 2019 80% of operators say their total utility costs are higher than 2019 94% of operators say their other operating costs (supplies, G&A, etc.) are higher than 2019 65% of restaurants took on new loan debt to adjust business models and continue operating during the first two years of the pandemic. Those loans were a mix of forgivable government loans, government disaster loans, and private-sector loans, according to the survey.

Paycheck Protection Program (PPP) loans were the most common — taken on by 59% of operators. 48% of operators took on an Economic Injury Disaster Loan (EIDL) issued by the U.S.

Small Business Administration or lending partner. 31% took on a private-sector loan from a bank, credit card or other entity. A majority of restaurants are still looking to fill positions — even in the face of a slowing economy.

Despite adding 74,000 jobs in July, the new survey finds 65% of operators report not having enough employees to support customer demand and 84% of operators say they will likely hire additional employees during the next six months. 19% of full-service operators say their restaurant is currently more than 20% below necessary staffing levels. 21% of limited-service operators say their restaurant is more than 20% below required staffing levels.

81% of operators say their restaurant currently has job openings that are difficult to fill. The survey of 4,200 restaurant operators was conducted by the National Restaurant Association Research Group July 14- August 5, 2022.

## Entities

- Franchising.com (publication)
- Restaurants (sector)
- menu pricing (topic)
- Kerry Pipes (person)
- restaurant operations (topic)
- labor costs (topic)
- Small Business Administration (regulator)
- economic pessimism (topic)

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Originally reported by Kerry Pipes, Franchising.com (https://www.franchising.com/articles/restaurant_operators_face_weaker_business_conditions_and_growing_economic_p.html). Summarized by Burnaze (https://burnaze.com/article/f685bf73-7710-4796-bc55-c3c032e49957).