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Survey Shows Arkansas Restaurants Still Hurting

3 min read

A new survey by Arkansas Hospitality Association finds restaurants in the state making dramatically less money than in the same time last year, and more than a third are considering closing until the pandemic passes.

It’s the latest poll of Arkansas eateries by the AHA, which surveyed members and non-members as part of a national survey by the National Restaurant Association. The survey took place from Nov. 17-30 and follows the results of a previous survey conducted in September.

The surveys come as the state and national hospitality industries continue to press political leaders for more relief amid continued economic fallout from the COVID-19 pandemic, which has prompted government restrictions and closures to mitigate spread of the virus.

Arkansas restaurants are currently operating at 66% capacity under state restrictions.

“With business conditions deteriorating, more federal government assistance is critical for the survival of many restaurants,” the AHA said in a news release on Monday. “Thirty-six percent of Arkansas operators say it is unlikely their restaurant will still be in business six months from now, if there are no additional relief packages from the federal government.”

The association said that, absent any federal help, some operators — 31% — are considering temporary closures until economic conditions improve.

The survey said consumer spending in Arkansas restaurants “remained well below normal levels in October,” with 84% of operators saying their total dollar sales volume that month was lower than in October 2019. Sales were down 28% on average, according to the report.

Other findings include:

  • Most operators don’t expect business conditions to improve in the coming months, with 64% percent expecting sales to drop during the next three months, with just 7% expecting sales will increase.
  • Seventy-four percent of operators said their restaurant’s total labor costs (as a percent of sales) are higher than they were before the outbreak. Only 15% said their labor costs are lower.
  • Eighty-five percent of operators said their restaurant’s profit margin is lower than it was before the outbreak.
  • Restaurant staffing remains below typical levels. Seventy-nine percent of Arkansas operators said current staffing is lower than what it would normally, and 30% of restaurants are more than 20% below normal levels.
  • Operators expect more layoffs. Thirty-eight percent expect staffing to decline during the next three months. Only 2% of operators expect their staffing levels will rise.

The AHA was unable to say how many Arkansas restaurants were included in its poll. Its results were included in the national survey released by the National Restaurant Association, which polled 6,000 restaurant operators and 250 supply chain businesses. 

In Arkansas, Gov. Asa Hutchinson has largely resisted further restrictions on businesses even as cases and hospitalizations have reached record levels. But on Nov. 19, he ordered bars, restaurants and clubs licensed to sell alcohol to close each day by 11 p.m., a restriction that’s scheduled to expire on Jan. 3. And last week, Hutchinson said he was considering reducing the size of indoor gatherings that would require state approval.

The Associated Press reported Sunday that a proposed COVID-19 relief bill was expected to get backing from President Donald Trump and Senate Majority Leader Mitch McConnell. The package, to be released Monday, would be attached to a larger year-end spending bill needed to avert a government shutdown this coming weekend. Among other things, it would reauthorize the Paycheck Protection Program to give a second round of subsidies to businesses struggling through the pandemic.

(The Associated Press contributed to this report.)

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