A waiter works at a restaurant in Alexandria, Virginia, on June 3, 2022.
Olivier Dullieri | AFP | Getty Images
Jeff Rothenberg is used to long waits at restaurants, even when tables are visibly open.
“Another restaurant we went to had seats available outside, but when we went to the host, they mentioned the kitchen was understaffed,” Rothenberg, chief operating officer at a California-based fintech firm, told CNBC. “So even though there were seats, he would put us on a 30-minute waiting list to be seated.”
Rothenberg was on a 30-minute waiting list for nearly an hour, he said. Then after sitting down he waited another 45 minutes for his food to arrive.
“It was the experience that makes me not want to eat out as much,” he said. “I felt bad for the servers because they were trying, but they could only do so much because they didn’t have enough cooks.”
This is a scenario that has been repeated in the food service industry since the beginning of the Covid pandemic in 2020 and it is also affecting restaurants and their staff.
The lockout in the spring of that year led to layoffs and furloughs for many cooks and waiters, prompting the federal government to support billions of dollars in forgivable loans to small businesses. The disease has ravaged the U.S. workforce, killing more than a million people over more than two years while sickening many millions more, according to the Centers for Disease Control and Prevention.
As states have eased restrictions, restaurant employment has rebounded, although the industry is still down 750,000 jobs — roughly 6.1 percent of the workforce — from pre-pandemic levels as of May, according to the National Restaurant Association.
Customers notice the difference. In the first quarter of 2022, customers mentioned short staff three times more often in their Yelp reviews than in the previous period, according to the restaurant review site. Mentions of long waits increased by 23%.
“I think the experience is different post-Covid. I see the restaurant industry has changed a lot,” Nev Wright, a health worker, told CNBC outside Firebirds Wood Fired Grill in Eatontown, New Jersey. “It wasn’t always like that – now it takes time, with costs and staff shortages and everything.”
The American Customer Satisfaction Index found that consumers are less satisfied with fast-food chains this year compared to 2021 — the sector’s score fell to 76 out of 100 from 78. Customers are less satisfied with speed and accuracy of their orders and from the cleanliness and layout of the restaurant.
Customer satisfaction scores for independent and small chain restaurants also fell this year to 80 out of 100, from 81, according to ACSI’s annual report. Some national full-service chains saw their results drop even more for the year: Dine Brands’ Applebees was down 5%, Darden Restaurants’ Olive Garden was down 4%, and Inspire Brands’ Buffalo Wild Wings was down 3%.
“It’s all very strange”
Eatontown resident Theresa Berweiler said over the past year she has consistently experienced early closings and long waits at restaurants, even when they are not busy.
“I’m 64 years old and I’ve never seen anything like this,” the receptionist told CNBC on Wednesday outside the local Chick-fil-A. “It’s all very strange. Covid has definitely changed the world and I’m not sure for the better.”
Restaurants aren’t the only businesses seeing how the labor crisis affects customer service. US consumer complaints against airlines more than quadrupled from pre-pandemic levels in April, according to the Transportation Department. Hotelier Hilton Worldwide is unhappy with its own customer service and needs more workers, Chief Executive Officer Christopher Nasetta said during the company’s quarterly earnings call in May.
For restaurants, staffing challenges are putting pressure on an industry already struggling with inflation and recovering lost sales from the pandemic. Alexandria Restaurant Partners, a group that owns and operates eight restaurants in Florida and Northern Virginia, has dramatically changed the way it does business.
“We’re not sure where all the workforce has gone, but a lot of them are gone, from managers to chefs to hourly workers,” said Dave Nicholas, a founding member of ARP.
A chef prepares food in the kitchens of Café Tu Tu Tango, a popular restaurant in Orlando, Florida.
Source: Alexandria Restaurant Partners
Now, Nicholas said, his focus is on recruiting and retention. The group opened a recruiting position and now has two full-time employees working to recruit much-needed employees to jobs with higher wages and better benefits than the group has ever had.
“Before, you could hire them as quickly as you needed them. These days, that’s not the case,” Nicolas said. “Our mission is to be an employer of choice. This comes with benefits we may not have had before, to servers, helpers and dishwashers. The cost of that was huge, but the turnover cost is huge, so we weighed it.”
But not all workers are getting paid more, even if their base wages have increased. Saru Jayaraman, director of UC Berkeley’s Center for the Study of Food Labor and president of One Fair Wage, which advocates for no tips, said frustration with understaffing often leads to lower tips for the workers. In turn, lower pay causes many restaurant workers to leave, exacerbating the problem.
“It’s a vicious cycle of people being unhappy with a service that might tip less, then not coming back and sales going down,” she said.
Historically, the restaurant industry has struggled with high turnover. The problem has only intensified during the Covid pandemic, as employees seek better pay and working conditions, worry about falling ill and struggle to find childcare. The lodging and food service industries had an exit rate of 5.7 percent in May, according to the Bureau of Labor Statistics.
Nicholas said that despite ARP’s recent implementation of retention bonuses and affiliate programs, in addition to higher wages and better benefits, it has been a “battle” to contend with the job market.
Full-service restaurants have been hit harder than limited-service eateries by the labor crisis, with staff down 11% from pre-pandemic levels.
And that means the dining out experience probably won’t be the same.
“Going to a restaurant and having them bring bread and butter,” said Nicholas Harari, owner of Barrel & Roost, a restaurant in Red Bank, New Jersey, “those days are over.”
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