New Survey: Restaurant Operators Endure Weaker Business Conditions as Economic Pessimism Grows | |
The costs of goods restaurateurs need most have continued to accelerate, and according to a new survey released today by the National Restaurant Association (NRA), 46% of operators say business conditions are worse now than they were three months ago.
This finding follows a prior survey in which 43% of operators said they think conditions will worsen in the next six months, which was the highest level of pessimism since 2008.
Findings from the new survey highlight how current economic conditions are disrupting the industry.
- Soaring costs are limiting restaurant operations. 85% of operators say their restaurant is less profitable than it was in 2019.
- Pandemic debt has come due, and operators can’t pay. 48% of operators took an Economic Injury Disaster Loan (EIDL), and now that the deferment period is ending for many of them. Of the operators that have not begun payments, only 23% say they can make principal and interest payments. Another 46% can make principal payments but not 30 months of accrued interest.
- Restaurants are slowly adding jobs to get back to pre-pandemic employment levels. 65% of operators report not having enough employees to support customer demand and 84% of operators say they will likely hire additional employees during the next six months.
The NRA Research Group conducted the new operator survey of 4,200 restaurant operators July 14- Aug. 5, 2022. Find a report of key findings here. Thanks to many of our IRA members that completed the survey, the IRA will get Illinois specific data - be on the look out for more information soon.
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Inflation Reduction Act Signed in Law
President Biden signed the Inflation Reduction Act into law yesterday, leaving out several major tax measures that the National Restaurant Association (NRA) long advocated against.
After 18 months of legislative discussions, the vast majority of restaurants will not see their taxes increase. Only restaurants with more than $1 billion in financial statement income and that pay less than a 15% effective tax rate will be subject to a new corporate alternative minimum tax (CAMT) beginning in 2023. Additionally, publicly-traded companies will be subject to a 1% excise tax for stock buybacks beginning in 2023.
In 2021, Congress and the Biden Administration began to consider tax increases that would both raise rates and broaden the amount of businesses subject to new taxes. Restaurants recovering from the economic effects of COVID strongly opposed these tax increases, and members of the NRA identified four primary goals to prevent new fees.
The NRA's advocacy played a critical role in ensuring that none of these four tax increases are included in the final bill:
- Any reduction to the qualified business income deduction, known as Section 199A, for thousands of restaurant businesses;
- Any 3.8% Net Investment Income Tax (NIIT) to the active business income of pass-through businesses, the vast majority of these entities representing small businesses.
- Any increase the corporate tax rate from 21% to 26.5%;
- Any repeal of the stepped-up basis, which would add an unworkable capital gains tax to inherited companies;
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Member Invite: Cubs Rooftop Membership Mixer | |
Taste of Fulton Market 2022 to Benefit IRAEF Restaurant Employee Relief Fund | | |
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To provide community support to the IRAEF’s Restaurant Employee Relief Fund while celebrating the vast and exciting talent of the Fulton Market Dining District, Morgan’s on Fulton and SYSCO present: The 2nd Annual Taste of Fulton Market.
After a sellout inaugural year that raised $6,200 for the IRAEF's Restaurant Employee Relief Fund, 2022’s Taste of Fulton Market is back and bigger than before.
ToFM is Sept 29th from 5 to 9 PM. For more information and tickets, click here.
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Chicago Chefs Unite to Raise Money for Humanitarian Relief | | |
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The Chicago Chefs Cook for Tigray initiative focuses on the humanitarian crisis taking place in Tigray, Ethiopia.
Join Host, Tigist Reda, and Chef Tony Priolo, Chef Sarah Stegner, Chef Darren Gest and Eda Davidman of Chicago Chefs Cook, and Jodi Fyfe of The Paramount Group for a charity event featuring a selection of twenty noteworthy Chicagoland chefs, curated tastings, performances and much more.
The event is Sept. 21 from 6 - 9 PM at the National Museum of Puerto Rican Arts and Culture. For sponsorship opportunities, contact Eda Davidman. For tickets, go here.
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Learn about Secure Choice Requirements for Restaurants with 16 + Employees | |
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Effective November 1, 2022, businesses in Illinois with 16 or more employees must offer a retirement savings program for workers who do not currently have a way to save at work.
Learn how to be in compliance with the law at our upcoming webinar about Illinois Secure Choice. Expert panelists from Illinois Secure Choice join the Illinois Restaurant Association to offer information on this program.
The webinar is Thursday, Aug 25 at 10 AM. To register, click here.
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NRA Webinar on Depreciation & Amortization | |
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Join Aaron Frazier, National Restaurant Association Vice President, Public Policy, to learn why the Permanently Preserving America’s Investment in Manufacturing Act, as well as undoing restrictive changes to the “Earnings Before Interest, Taxes, Depreciation, and Amortization” (EBITDA) calculation, are critical for restaurant development and growth.
The webinar is Wednesday, Aug 31st at 1 pm CT. To register, click here.
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