GRAND RAPIDS, Mich. (WXMI) — The Michigan Restaurant and Lodging Association released some alarming survey results Wednesday, revealing the state's restaurant industry is still struggling to recover from the pandemic.
Despite being several years out from COVID-19’s intermittent forced closures, restaurants are still facing a number of significant challenges.
The survey polled 200 restaurant operators across Michigan, representing about 3,000 locations and more than 100,000 employees.
- 60% reported having fewer customers than a year ago.
- 40% are not profitable.
- 55% are operating without adequate staffing.
- 60% cited inflation as their biggest challenge.
- Only 25% experienced sales growth over the last year.
Justin Winslow, president and CEO of MRLA, noted that "the residual impact of the pandemic has had a long tail.”
He explains that, based on their results, "restaurants are a little too expensive for some people, and they're going less often.”
The survey results signal a concerning moment for the industry, with some restaurants like Jack Danger's Chicago Style Italian Beef in Grand Rapid’s Eastown neighborhood making the difficult decision to close their doors for good.
“In December, I kind of knew, with a few different things going on with that neighborhood, it just really wouldn't work for us,” owner and operator Steven Lowenthal told FOX 17, WXYZ's Grand Rapids sister station, on Wednesday.
Lowenthal owned and operated Jack Danger’s with his wife for about nine months, after opening in 2023.
“We tried to present something in a way that was first class, first rate, and that's all I can say on that is that we tried really hard and it just didn't work around here,” he explained.
The current inflation trends weren’t helping with their bottom line either.
“The stuff I get is very expensive,” he said Wednesday. “I have to get it from Chicago.”
In addition to the issues outlined in the MRLA report, Lowenthal says it can be tough having to utilize third-party delivery drivers.
“You’re also relying on Uber Eats, Doordash, Grubhub and sometimes, those situations aren't your problem,” he explained.
Now, he is planning to take his concept somewhere out of state.
On top of this list of concerns, the Michigan Supreme Court is now considering eliminating what is called the tip credit for restaurants.
"What is going to happen to this industry, especially in the full-service industry that employs servers, it will be catastrophic,” Winslow said.
The MRLA expects the court to announce a decision within the next 30 to 45 days.
If the changes do go into effect, the MRLA says the state will lose a lot of restaurants.
"1 in five full-service restaurants, according to this survey, said they will just close their doors forever,” Winslow explained. "They're barely profitable, if they are at all profitable right now."
The MRLA is urging support for the industry, citing the need for "a more comprehensive approach to address the challenges facing restaurants and other small businesses.”
Read MRLA's full survey below:
Operations Survey Press Release - 6-12-2024 by WXMI on Scribd
You can read more about the MRLA’s perspective on the potential changes at their website HERE.
