A recent survey of the New Mexico restaurant industry conducted in partnership with the National Restaurant Association has revealed troubling trends and highlighted a feeling of hopelessness that many are experiencing. According to the data, Business Conditions, Employment and Overall Costs are the biggest obstacles preventing a recovery.
Although sales improved from the early months of the pandemic, business conditions remain challenging for many New Mexico restaurants. Overall, 61% of restaurant operators say their total sales volume in October 2021 was higher than it was in October 2020, but when compared with October 2019 pre-pandemic levels, 53% of many New Mexico operators say their sales were lower in October 2021.
Business conditions deteriorated in recent months, according to many New Mexico operators. 46% of operators say their restaurant experienced a decline in customer demand for indoor on-premises dining during the last 3 months.
Looking ahead to 2022, many restaurant operators do not expect a return to pre-pandemic sales levels. 44% of operators expect their 2022 sales volume will remain below 2019 levels. An additional 27% of operators say business conditions will never return to normal for their restaurant.
Although the industry added back many of the jobs lost during the pandemic, a majority of restaurants remain understaffed. 71% of New Mexico operators say their restaurant currently does not have enough employees to support existing customer demand.
Among restaurants that are currently understaffed, 75% of operators say their restaurant is more than 10% below necessary staffing levels. 36% say they are more than 20% below necessary staffing levels. 76% of operators say their total labor costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak. Only 8% of operators say their labor costs declined as a percent of sales.
Restaurants are being impacted by disruptions in the supply chain. 97% of operators say their restaurant experienced supply delays or shortages of key food or beverage items during the past 3 months. 92% of operators say their total food costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak.
58% of operators say their total occupancy costs are higher than they were prior to the COVID-19 outbreak. 72% of operators say their profit margin is lower than it was pre-pandemic. Most operators do not expect their profitability to improve in 2022 with 41%expecting to be less profitable in 2022.