Omicron is fading but soon too are many NJ restaurants

A new report finds the impact of the omicron variant has been nothing short of devastating on New Jersey restaurants over the past month and a half, and many of them need financial assistance if they’re going to survive.

A just-completed survey of Garden State restaurants finds 93% experienced a decline in customer demand for indoor on-premises dining in because of the omicron variant, and most restaurants are less profitable now than before the pandemic started.

Drastic impact on restaurants

Dana Lancellotti, the president and CEO of the New Jersey Restaurant and Hospitality Association, said restaurants are in serious trouble.

“We found that 50% reduced hours of operation on days that they’re usually open, 30% closed on days that it would normally be open, 23% reduced seating capacity,” she said.

She said the report also finds “80% of business operators say that the conditions for their restaurant are worse now than they were three months ago, so we’re definitely not heading on an upswing.”

A growing number or restaurants are no longer offering sit-down service, they are only offering take-out.

“That is actually becoming a consideration in order to survive, without the labor and the things they need with people coming in the door,” said Lancellotti.

Help is needed

She said it’s imperative that Congress approve a second round of Restaurant Revitalization Fund (RRF) money.

She pointed out a majority of restaurant operators that applied for an RRF grant but did not receive any funding will probably wind up going out of business if they do not wind up getting financial help soon.
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“It’s not something you can turn back, you can’t turn back time, once these people close in most cases they are not able to open back up again,” she said.

During the first round of RRF funding, 3,077 New Jersey restaurants shared $913.5 million in federal grant money, but 4,706 restaurants that applied for a grant received nothing.

The survey also found:

• 68% of New Jersey restaurants operators have accumulated additional debt since the beginning of the pandemic

• 79% of operators have fallen behind on expenses since the start of the COVID health emergency

• 70% of operators report their restaurant is less profitable now than it was before the pandemic began

• A majority of restaurants have not experienced a complete sales recovery to pre-pandemic levels: 68% of operators say their sales volume in 2021 was lower than it was in 2019. Only 18% of operators reported a same-store sales increase between 2019 and 2021.

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com.