Study: U.S. consumers see restaurant and retail quality declining due to labor shortages

Poor service. Limited menus and stocks. Shorter operating hours. The pandemic’s labor shortage has plagued restaurants, retailers and their customers, according to a new consumer survey from Premise, a global marketing data collector.

And the short-term outlook isn’t too bright, says Wall Street trader Charles Mizrahi.

“The labor shortage is a temporary problem as demand declines as the economy slows down,” said Mr. Mizrahi, founder of Alpha Investor. “Companies will soon no longer worry about having too few employees, but about having too few customers or sales.”

Premise reported this week that 61% of U.S. consumers noted a drop in service quality at restaurants, 76% cited reduced hours of operation, and 60% pointed to fewer menu choices since the pandemic began. in 2020. Nearly half – 46% – said these changes dampened their urge to eat out.

Patrick Fahey, manager of The Dubliner restaurant in Washington, DC, said the popular tourist spot near Union Station on Capitol Hill has kept employees and customers “pretty happy” by focusing on in-person service.

The Irish pub does not have online ordering, he said, despite District of Columbia requirements for masks and vaccine cards keeping some people away from restaurants.

“We had a lot of staff coming back to us gradually, so we were lucky,” Mr Fahey said.

But Ruth’s Chris, an upscale steakhouse chain, has closed at least two dozen restaurants in the past two years, including one in Bethesda, Maryland, which closed on Christmas Eve.

And national chains California Pizza Kitchen, Friendly’s, Logan’s Roadhouse, Pie Five, Ruby Tuesday and Sweet Tomatoes also closed locations last year.

Joe Walch, a manager at Logan’s Roadhouse in Bull Run, Va., said he’s been hiring servers and customer volume has been up and down lately.

“When there are higher case reports, it tends to keep people away more,” Walch said. “And I’m definitely noticing a slower influx of job applications than I’ve seen in the past.”

Premise CEO Maury Blackman said the survey results show “customers are increasingly dissatisfied” with companies struggling to retain their workforce.

According to the survey, 51% of consumers said these experiences changed their opinion of minimum wage for restaurant workers and 64% said restaurant workers were underpaid.

In the retail sector, 55% of consumers said the quality of service had declined at their most frequented store over the past two years and 52% said their shopping experience at their favorite store had “a negative impact on their perception of in-person shopping”.

The Premise study comes as the US Department of Labor reported on Wednesday that 4.3 million Americans quit their jobs in December, down slightly from the record 4.5 million who quit in November.

As layoffs and redundancies fell to record levels, the government found 330,000 more job vacancies in December than in November and a total of 11 million vacancies exceeding the number of people available to fill them.

Christine McDaniel, senior researcher at George Mason University’s Mercatus Center free market think tank, said the Premise study reinforces the tendency of workers aged 55 to 74 to retire even as other age groups are returning to work.

“There’s a lot of shuffling going on in the job market right now,” she said. “As these workers leave, their jobs are freed up and that stimulates a lot of movement for existing workers. There are new opportunities for existing workers to move up or move into new jobs or industries.

Ms McDaniel, a former deputy assistant secretary to the US Treasury, said that’s why the leisure and hospitality industry – which includes restaurants – remained understaffed in December even as the hospitality industries construction and professional services have recovered their workforce.

“The restaurant industry tends to require a lot of face-to-face contact, which makes these jobs more difficult right now, wearing masks, dealing with sober customers and the risk of contracting COVID,” a- she declared. “With all the movement in the job market, there are more options these days for workers who would otherwise work in a restaurant.”

Sean Higgins, a labor and law enforcement researcher at the libertarian Competitive Enterprise Institute, said the Premise survey reflects shared dissatisfaction among service sector workers and customers about online ordering during the pandemic. .

“For workers, accepting a job as a waiter, bartender or cashier is riskier than ever,” Mr Higgins said. “On the one hand, you are regularly exposed to other people. If you are a server or a bartender, you still see fewer customers and therefore less tips.

He said the struggle of restaurants and retailers to stay open amid reduced in-person crowds, in addition to long shifts and hours resulting from reduced staff, added to the discontent.

“So these workers are starting to look for jobs elsewhere, which is making the labor shortage in the industry worse,” Mr. Higgins said. “Businesses are finding it even harder to hire and their quality of service is declining, prompting people to stay home and order online instead.”

The so-called Great Retreat also affected educational staff. On Monday, the state-funded California Center on Teaching Careers launched a “we want you” campaign to address what it called an “urgent” crisis of teachers leaving the profession due to the burnout during virtual learning.

Donna Glassman-Sommer, executive director of the agency that represents school districts in more than half of the state’s counties, said California has more than 30,000 vacancies for educators due to a “surge early retirement” which had a negative impact on students and their families. The campaign hopes to recruit and train replacements.

Hans Dau, CEO of business advisory firm Mitchell Madison Group, said retirements will have a long-term impact on these industries, the labor shortage “will be a temporary phenomenon, given the country’s attractiveness to global pools of labor and capital”.

“The tail end of the baby boomer generation decided to retire at the start of the pandemic, buoyed by record stock market gains, while GenZers launched home-based businesses, funded by unprecedented levels of venture capital , which is good results,” Mr. Dau said. “The overall labor force participation rate is now back at about its historical trend line, and gaps in low-skilled jobs will be filled by a mix of immigration and automation.”

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