Michigan restaurants struggling from impact of omicron variant, study says

The omicron variant of the novel coronavirus has severely impacted Michigan's restaurant industry, according to an industry survey released on Wednesday. 

More than 80% of  Michigan restaurants have seen demand drop in recent weeks for indoor dining because of a surge in cases from the omicron variant.

Three-quarters of restaurants say business conditions are worse than three months ago. 

Without a new round of aid for restaurants hard hit by COVID-19, nearly 43% of Michigan restaurant operators feel it was unlikely they'd stay in business.

The Michigan Restaurant & Lodging Association (MRLA) on Wednesday released Michigan data provided by the National Restaurant Association (NRA) who surveyed more than 4,000 restaurant operators nationwide Jan. 16-18.

In Michigan, the survey results were just as somber for the hospitality industry as a previous survey released three months ago.  

More:Some Michigan restaurants got millions in relief money — while others got nothing

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“Our survey delivers reliable data to what everyone in Michigan already knows — that omicron is closing restaurants and significantly complicating our recovery,” Justin Winslow, association president and chief executive, said in a news release.

Since the beginning of the pandemic, the restaurant industry has been severely affected. They’ve faced several shutdowns of indoor dining, capacity limits and other restrictions.

Because of the recent omicron variant surge Michigan restaurants have:

• Reduced hours of operation on days that they are open
• Closed on days that are normally open
• Reduced seating capacity
• Changed to only offering off-premises for a period of time
• Found business conditions for their restaurant are worse now than they were three months ago with only 4% saying business conditions improved during the last three months.

The group said that on top of the latest conditions, restaurants are still feeling the effects and challenges of the overall pandemic.

According to the survey, since the beginning of the pandemic restaurants have:

• Accumulated additional debt
• Fell behind on expenses 
• Are less profitable 

Other key findings: 

The majority of restaurants surveyed have not experienced a complete sales recovery to prepandemic levels.

• Sales volume in 2021 was lower than it was in 2019. And only 23% of operators reported a same-store sales increase between 2019 and 2021.
• Higher menu prices attributed to sales growth in 2021 as operators were forced to offset sharply rising costs
• Operators (80%) said total costs (as a percent of
• sales) were higher in December 2021 than in December 2020.
  
• Customer traffic levels also remained below 2019 levels for most restaurants. 

Part of the survey also included findings of the impact the Restaurant Revitalization Fund, or RRF, had on restaurants that did or did not receive grants. 

More:These Michigan businesses received the most federal COVID-19 relief funding for restaurants

The RRF was a more than $28 billion federal fund created to help restaurants nationwide recover from the COVID-19 pandemic. Processing and dispersing of the funds was through the U.S. Small Business Administration and began in May 2021. The fund was depleted early on and many restaurants were left out. 

Nationwide and in Michigan, some restaurants were promised a grant, but the SBA later rescinded the money after three restaurants sued the agency in federal court over how the agency dispersed funds.

More than $780 million went to nearly 3,300 Michigan restaurants. Nearly 9,000 Michigan restaurants applied for funding. 

Industry associations and restaurants are pushing for the legislation on the Restaurant Revitalization Fund Replenishment Act of 2021, which seeks an additional $60 billion.

Nationwide, the NRA said 900,000 jobs were saved by the first round of funds granted to restaurants from the RRF, including 35,000 in Michigan. 

The restaurants that applied but did not receive funding said a future grant would allow them to "retain or hire back employees that would otherwise have been temporarily or permanently laid off."

Winslow added that the RRF fund works and that the association is calling on Congress to support the fund.

““The RRF was a critical lifeline to many of our restaurants, but far more remain on the sidelines, desperately looking for support before they are forced to close their doors forever," Winslow said.

Replenishing the fund the NRA estimates, Winslow said, would save an additional 50,000 Michigan restaurant jobs. 

Contact Detroit Free Press food writer Susan Selasky and send food and restaurant news to: 313-222-6872 or sselasky@freepress.com. Follow @SusanMariecooks on Twitter.

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