Uncertain times for Ohio restaurant operators

It is not a predictable time for Ohio restaurant operators, says John Barker, president and CEO of the Ohio Restaurant Association.

“Restaurants and hospitality industry operators are struggling to manage in a wildly volatile time with soaring costs for food and supplies, record-high gasoline and energy prices,” Barker said in a recent news release.

 In addition, the industry also is dealing with a shortage of employees and weak consumer sentiment, he said in the release.

The unemployment rate for Ohio’s Columbus metropolitan region, for example, was 2.9% in May 2022, down from 4.6% the same time a year ago.

“We are concerned that this mix is leading to a lack of profitability for most operators as margins decline and a recession looms,” Barker said in the release.

The group is hosting the Mid-America Restaurant Expo and Conference, set for Sept. 25-26 in Columbus.

Despite a decline in customer traffic, restaurant sales have been buoyed by an industry average 7.4% increase in menu prices this year, according to a July report from the Ohio Restaurant Association.

The Bureau of Labor Statistics said food prices in May 2022 in the East,  North and Central regions, including Ohio, were 11.7% higher than year-ago levels. That pace of inflation was slightly higher than the overall U.S. food inflation rate in May of 10.1% compared with a year ago.

There are numbers which show Ohio’s foodservice and restaurant business has gained much strength since the peak of pandemic restrictions in 2020.

The U.S. Bureau of Labor Statistics reports that employment in Ohio’s travel and leisure industry numbered 542,800 in May, up 1% from 538,100 a month earlier, up 10% from 493,700 a year ago and up 81% from the pandemic sector low in April 2000 of 300,600.

Cloudy outlook

In its May Restaurant Performance Index, the National Restaurant Association said that, although U.S. restaurant operators reported positive same-store sales and customer traffic compared to year-ago levels, their outlook for the economy continued to deteriorate. More than four in 10 restaurant operators expect economic conditions to worsen in the next six months — the highest reading since 2008.

The association said the Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators, stood at 101.6 — down 0.3% from the previous month and the fifth consecutive monthly decline. 

“While a majority of restaurant operators expect their sales to increase in the coming months, they are decidedly pessimistic about the direction of the overall economy,” the group said in a news release.