News

Media Alert: Restaurant Recovery Update

Nov 4
2021

Austin, TX (Nov. 4, 2021) – On Tuesday, November 2, 2021, Texas restaurant leaders met at The County Line on the Hill in Austin, Texas, to update the community on the state of the industry’s recovery.

Kelsey Erickson Streufert, Chief Public Affairs Officer for the Texas Restaurant Association (TRA), explained that the past few months have been particularly challenging for Texas restaurants, but there are reasons for hope and optimism as the holidays approach.

Dr. Emily Williams Knight, Ed.D., President and CEO of the TRA, shared that, according to a recent survey of Texas restaurant operators:

  • 96% are paying more for food,
  • 64% are paying more for occupancy or rent, and
  • 91% have much higher labor costs.

Dr. Knight also shared the latest information about wholesale food costs, which have increased dramatically over the past year. She indicated that:

  • One year ago, a beef tenderloin cost a restaurant $100; today it’s $200.
  • Cooking oil was $20 for five gallons, but now it’s $40.
  • Chicken, which is very hard to come by, has gone from $3 a pound to $6 a pound.
  • Flour is up 30%.
  • Pork is up 27%.
  • Eggs are now up 40%.

“Making matters worse, the Delta variant depressed sales considerably in dining rooms. 91% of our operators have confirmed that they saw a decrease in traffic for dine in,” added Dr. Knight.

Dr. Knight then shared some reasons for optimism. She explained that the holiday season “is a critical season even in a good year for most restaurants, so our number one message to the public today is to please, please dine out. Please buy a gift card from a restaurant.” Dr. Knight also explained that the TRA continues to work on behalf of the industry’s recovery through efforts like:

  • Recently securing $180 million for restaurant and hospitality recovery in Texas’ bill allocating American Rescue Plan Act funding; and
  • Partnering with the Texas Workforce Commission to provide restaurant workers with one-year of free childcare benefits and free employee certifications.

At the federal level, Dr. Knight indicated that the TRA “continue[s] to lobby Congress to pass commonsense immigration reform that will help address our country’s labor and supply chain challenges.” She also explained the importance of Congress replenishing the Restaurant Revitalization Fund: “There are currently 12,000 eligible restaurants that applied for this federal funding that were left in the dark with not a single penny after 19 months of hardship.”

Skeeter Miller, Owner of The County Line, explained that they’ve been in business for 46 years at this location, weathering the dot come bust, the real estate crash in the 80s, and 9/11. When introducing his business, he explained, “I think I’m proudest of the fact that our average employee tenure is 37 years. You know, basically our employees are the lifeblood of our business.”

Mr. Miller explained that the past 19 months have delivered a series of challenges, starting with COVID-19 shutting their doors, “the SNOVID ice storm,” and then the Delta variant. Mr. Miller added, “We really felt like we were getting somewhere, and then the variant hit. We are overcoming that.”

Mr. Miller then described how “the supply chain crash” was impacting his business. Holding up a straw and lid, he explained, “Just to give you an idea, … we’re having trouble getting straws and lids to cover the drinks. That’s how bad it’s gotten. And not only that, but you just think about the supplies you can’t get, that you’re trying to sell, and you’re trying to be open, but all of the vendors that you buy from, their prices are increasing. You’ve got fuel surcharges; you’ve got all these extra charges that are coming along that affect the price.” He added, “Restaurants, they’re trying to hold their costs down as much as they can and not raise prices. I mean, this is really a difficult time.”

Mr. Miller also emphasized the importance of safe operating protocols, explaining, “That’s why we continue the TRA Promise, to keep things safe, healthy, and happy while you’re in our home here at the restaurant.” He then displayed a copy of his COVID-19 procedures manual.

“I’ve always said hope is not a strategy in our industry,” Mr. Miller said, pausing to collect his emotions, “but the last 18 months has been terrible. And so, come on out. Come see us.”

Rita Barragan, General Manager of Asadas Grill, explained that she “grew up in the restaurant business, basically born into it.” “I worked from busser, to server, to dishwasher on the worst days, management and bartending and all that good stuff, to now I’m the GM of Asadas Grill,” she added.

“I will never forget, March of 2020 when my staff and I, we were just watching the TVs, holding our breath. ‘They’re not gonna’ close us down; they’re not gonna’ close us down.’ And then it happened, and we had to pivot so quickly….” She later added, “Without our staff--, we would not be where we are today, without them.”

Ms. Barragan also explained that when COVID-19 hit, they not only lost their dining room business, but people also canceled events and requested their deposits back. “They were scared. We were scared. We had to give money back while no money was coming into us, and that was really hard for us.”

Ms. Barragan added, “But luckily we kept going, and we were able to open our second store at Asadas Grill, which we were already working [on] before COVID hit. We said, ‘You know what? We need to keep going. Restaurants can survive this, and we will survive this.’” Ms. Barragan then explained that they were able to open Asadas Grill in March of 2021. “Since then, our biggest challenge right now is just getting people in the door.” “Last June it felt like we were out of the waters, and going and we were swimming, and then all of the sudden, BOOM, Delta hit, and we were back to square one. So it’s definitely been a rollercoaster, up and down, and up and down.”

Ms. Barragan later indicated that TRA securing alcohol to-go has been a big help. “That’s how the community can keep helping,” even for those customers who don’t feel comfortable coming to eat inside the restaurant.

Alex Eagle, CEO of Freebirds World Burrito, said that Freebirds operates 56 restaurants in Texas, employing over a thousand people in the state.

“2020 was an extremely challenging year, but 2021 has proven to be no different for our industry. We’re facing extreme labor shortages and food cost increases like we’ve never seen before. Our average restaurant at Freebirds employs 18 people, and we have had to learn how to struggle but continue to operate with 15 people.” He later added, “it’s been a very challenging road, and we thank our guests for their patience as we’ve struggled to operate with fewer staff than we’ve ever had to operate a restaurant with before.”

Mr. Eagle next shared that they’re facing food cost increases that are “simply not sustainable for the restaurant industry.” He then explained that the major cost increases associated with construction are making it difficult for Freebirds to expand and hire more people in Texas.

Mr. Eagle also discussed some of the steps that Freebirds is taking to address the workforce shortage.

“[W]e already pay extremely competitively,” he explained, before adding, “we are focusing on a longer term strategy. We’re improving how we select our employees and making sure our employees are aligned with our core values as an organization. We’re putting more investment into training and development—and specifically leadership development—than we’ve ever done before. We’re improving work conditions for our employees as well. We’re very, very focused on eliminating those jobs that nobody wants to do like washing dishes wherever we can. And we’re also investing in technologies that will enhance both, the Tribe experience as we call them for our employees, as well as our guest experience.”

Wrapping up his comments, Mr. Eagle added, “Texas is a great state for the restaurant industry. We respect entrepreneurs in Texas, and we certainly respect great food. We let our restaurants do what they do best—create jobs, tax revenue, and provide a lot of second opportunities and second chances for people. And we do it while also creating great experiences for family and friends.”

Dr. Knight concluded the presentation, adding: “I think you can see the emotion today. Our operators and employees are tired. They’ve been feeding through the pandemic, feeding through the ice storm. And I think as a community right now and as Texans, we need to come together, and we need to lean in and help these brands. There’s no way through the winter months that a lot of them will make it through without us buying gift cards, going on their patios, taking to-go, and really investing in them.”

Dr. Knight opened it up for questions from the media in attendance.

  • In response to a question about the number of restaurants that have closed, Dr. Knight indicated that an estimated 9,000 Texas restaurants have closed due to the pandemic. “Unfortunately, about eight out of ten of those are small businesses.” “Without additional relief from the federal government, and with this downturn in sales, with skyrocketing prices, that number could accelerate through the winter months.” Dr. Knight also added, “And remember, before the pandemic, we had 1.3 million employees, second-largest private employer. We did $70 billion in sales just in Texas with almost 50,000 freestanding units. And so we are a very important producer to the economy in Texas, which is why we need to lean in and help make this transition to recovery.”
  • In response to a question about staffing concerns and the holiday season, Dr. Knight explained that there’s a lack of workers at every section of the food supply chain, from production facilities to truck drivers to staff inside the restaurant. She also indicated that restaurants are looking to become more efficient with technology, but they cannot lose the customer experience. She added that gift cards a great way to support restaurants and their employees.
  • In response to a question about where the industry’s workers have gone, Dr. Knight indicated that there was a shortage even before the pandemic. She also emphasized the importance of childcare, which is why the TRA partnered with the Texas Workforce Commission to provide free childcare benefits. She also indicated that the restaurant industry isn’t alone in facing a worker shortage. Dr. Knight added that the industry’s wages have gone up almost double the increase of other industries this year, but that hasn’t brought workforce levels back.
  • In response to another labor question, Dr. Knight indicated that the Texas restaurant industry currently has about 170,000 open jobs, with 91% of operators reporting that they don’t have enough staff to get to 100% capacity. We have about 1.1 million jobs nationally that are open.
  • In response to a question about wages, Dr. Knight indicated that workers are being paid well above the minimum wage now, with workers receiving $15-20 dollars for many entry-level positions.

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