Open kitchen (Emilie Bourdages via Shutterstock)

The COVID-19 pandemic may have been bad for restaurants, but inflation is even worse, according to a new survey by the Connecticut Restaurant Association. The survey found that 43% of Connecticut restaurateurs say business conditions are worse today than they were three months ago. 

The finding is similar to the one found by the National Restaurant Association in June, which estimated that conditions will worsen in the next six months. 

“Restaurant operators are masters at balancing adaptation and innovation to provide amazing service for their customers,” Scott Dolch, Connecticut Restaurant Association president and CEO, said. “While operators are more pessimistic about the economy, they aren’t letting that get in the way of serving great food, providing exceptional service, and creating a memorable experience.”

The summer dining season and the waning of the pandemic were supposed to boost restaurant business, but it was coupled with an increase in supply and labor costs. 

According to the U.S. Bureau of Labor Statistics, wholesale food prices have increased 16.3% in the last 12 months and nationally menu prices have only risen 7.6% in the same period. The result: Profits are suffering. 85% of Connecticut operators say their restaurant is less profitable than it was in 2019.

In Connecticut, 84% of restaurants said their total food an beverage costs are higher now than in 2019. Rent and utility have also gone up. Connecticut restaurants said 69% of their occupancy costs are higher than 2019 and 86% said their utility costs are higher. At least 94% said their operating costs, which includes supplies are higher than 2019. 

“Consumers are watching prices rise faster in grocery stores than they are in restaurants and see an increased value in spending their food dollars in restaurants. However, the moderate menu price increases aren’t balancing the surging input costs and this is forcing operators to cut hours, change their menus, postpone expansions, and reduce third-party delivery,” Dolch said.

Labor is also still a problem. 

A majority of restaurants are still actively seeking to fill positions — even as they face building headwinds of a slowing economy. Despite the overall industry adding 74,000 jobs in July, in the new survey, 59% of Connecticut operators report not having enough employees to support customer demand, 75% of operators say they will likely hire additional employees during the next six months and 80% of operators say their restaurant currently has job openings that are difficult to fill.

“The restaurant industry is built on hospitality, and to ensure we can provide the highest levels of service, we hire talented people,” Dolch said. “We know that many people have been reconsidering their careers recently, and we hope that they will look seriously at the industry. Restaurants have good-paying jobs available at every experience level for people from every background. And these jobs provide the skills necessary to be successful in any career, and in life.”