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Customer service suffers in understaffed restaurants as Covid takes its toll

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A waiter works at a restaurant in Alexandria, Virginia, on June 3, 2022.

Olivier Douliery | AFP | Getty Images

Jeff Rothenberg has become accustomed to long wait times in restaurants, even when tables are visibly open.

“Another restaurant we went to had open seats outside, but when we went to the host, they said the kitchen was understaffed,” Rothenberg, an operations director at a California-based fintech company, told CNBC. “So even though he had seats, he would put us on a 30 minute waiting list to be seated.”

Rothenberg was on the 30-minute waiting list for nearly an hour, he said. When he sat, he waited another 45 minutes for his food.

“It was the kind of experience that makes me not want to eat out that much,” he said. “I felt sorry for the servers for trying, but they could only do so much because they didn’t have enough cooks.”

It’s a scenario that has been repeated in the foodservice industry since the Covid pandemic began in 2020, and it’s also taking its toll on restaurants and their staff.

Lockdowns in the spring of that year led to layoffs and furloughs for many cooks and waiters, prompting the federal government to repay billions of dollars in forgivable small business loans. The disease devastated the American workforce, killing more than a million people and sickening many millions more over the course of more than two years. according to the Centers for Disease Control and Prevention.

As states eased restrictions, restaurant employment recovered, although the industry still has 750,000 jobs — about 6.1% of the workforce — from pre-pandemic levels in May, according to the National Restaurant Association.

Customers notice the difference. In the first quarter of 2022, customers were three times more likely to mention staff shortages in their Yelp reviews than in the period a year ago, according to the restaurant review site. Reports of long wait times increased by 23%.

“I think the experience has been different since Covid. I see the restaurant industry has changed a lot,” Nev Wright, a health professional, told CNBC outside Firebirds Wood Fired Grill in Eatontown, New Jersey. “It wasn’t always like this — now it takes time, with costs and staff shortages and all that.”

The American Customer Satisfaction Index shows that consumers were less satisfied with fast food chains this year than in 2021. The sector scored instead of 78 from 76 to 76 out of 100. Customers were less satisfied with the speed and accuracy of their orders and with the cleanliness and layout of the restaurant.

The customer satisfaction scores for independent and small restaurant chains have also fallen this year from 81 to 80 out of 100, according to ACSI’s annual report. Some nationwide full-service chains have seen their scores drop even further year after year: Dining Brands’ Applebees fell 5%, Dardena Restaurants’ Olive Garden 4%, and Inspire Brands’ Buffalo Wild Wings 3%.

‘Everything is very strange’

Eatontown resident Theresa Berweiler said she has consistently faced early closing times and long wait times at restaurants over the past year, even when they are not busy.

“I’m 64 years old and I’ve never seen anything like it,” the receptionist told CNBC outside a local Chick-fil-A on Wednesday. “Everything is very weird. Covid has definitely changed the world, and I’m not sure if it’s better.”

Restaurants aren’t the only companies seeing customer service because of the labor shortage. According to the Department of Transportation, US consumer complaints against airlines more than quadrupled in April from pre-pandemic levels. hotelier Hilton Worldwide is unhappy with its own customer service and needs more employees, CEO Christopher Nassetta said during the company’s May quarterly earnings report.

For restaurants, workforce challenges have put 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 staff has gone, but a lot of them are gone, from executives to chefs to clockwork,” said Dave Nicholas, one of ARP’s founders.

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 recruitment and retention. The group opened a recruiting position and now has two full-time recruiters working to bring much-needed employees into jobs with higher wages and better benefits than the group has ever had.

“You used to be able to hire them as quickly as you needed them. Today, that’s not the case,” Nicholas said. “Our mission is to be the employer of choice. That comes with benefits that we may not have had before, right down to servers, busboys and dishwashers. The cost of that was huge, but the cost of sales is huge, so we weighed it. ”

But not all workers are taking home more wages, even if their base wages have increased. Saru Jayaraman, director of the Food Labor Research Center at the University of California Berkeley and president of One Fair Wage, which advocates abolishing tip wages, said frustration from understaffing often leads to lower tips for employees. Lower pay, in turn, causes many restaurant workers to quit, exacerbating the problem.

“It’s a vicious circle of people who aren’t happy with the service, who might tip less, then they don’t come back and sales drop,” she said.

The restaurant industry has traditionally suffered from high turnover. The problem has only been exacerbated during the Covid pandemic as workers seek better wages and working conditions, worry about getting sick and struggle to find childcare. According to the Bureau of Labor Statistics, the lodging and hospitality sectors had a 5.7% shutdown rate in May.

Nicholas said that despite ARP’s recent rollout of retention bonuses and affiliate programs, in addition to higher wages and better benefits, it has been a “battle” to compete with the job market.

Full-service restaurants have been hit harder than limited-service restaurants due to the labor shortage, with headcount declining 11% from pre-pandemic levels.

And that means the dining out experience probably won’t be the same again.

“Going to a restaurant and having them bring bread and butter,” said Nicholas Harary, owner of Barrel & Roost, a restaurant in Red Bank, New Jersey, “those days are gone.”

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