NJ Restaurant Association Survey Highlights Members' Fear Of Weather-Related Economic Impact

STATE SALES TAX COLLECTIONS EXPECTED TO DROP AS SNOW STORMS FORCE BUSINESS CLOSINGS

Restaurants in New Jersey, which have been trying to weather the storm of a depressed state economy, are now contending with a crippling business downturn as a result of winter-related store closings. Given the realities of current and projected revenue shortfalls, the New Jersey Restaurant Association (NJRA) is applauding Governor Christie for his activity to set the State finances on a realistic course.

According to a survey conducted by the NJRA, the economic impact wrought by inclement weather is expected to seriously hurt individual establishments as well as, in turn, state government – which will realize less sales tax income due to decreased restaurant revenues.

The NJRA survey showed that more than 94 percent of the group’s members sampled expect to send fewer sales taxes to Trenton as a direct result of lost business caused by winter storms. What’s more, restaurateurs anticipate suffering from increased operating costs for snow removal and other large-scale logistical outlays.

These two factors are combining to darken the economic outlook for New Jersey and the state’s restaurant and hospitality industry, the NJRA believes.

“History is repeating itself as New Jersey restaurants are again dealing with weather-related problems that are decreasing sales and increasing expenses,” said Deborah Dowdell, president of the NJRA. “A similar situation occurred last summer, when torrential rains and local flooding had a devastating impact on tourism and virtually all aspects of business and industry.

“The fact is, severe storms have a highly negative impact on businesses – beginning with lost wages for employees, lost sales for employers, and lost sales taxes for state government,” Dowdell added. “These issues further underscore the need for state leaders to look broadly at all the forces and factors involved in bolstering the economic prospects of restaurants and other New Jersey small-businesses in 2010.”

Other findings from the NJRA survey include:

· 87.5 percent of NJRA members surveyed were forced to close their establishments earlier than normal due to winter storms in the first quarter of 2010 – with closings ranging from one to three days.

· Restaurants reported lost reservations ranging from a minimum of 50 percent to 100 percent depending on the severity of the storms in local areas (e.g., South New Jersey and the Philadelphia metropolitan area, which was particularly hard hit).

· Nearly 70 percent of respondents incurred significant additional maintenance costs for snow removal and other logistical measures ranging from $250 to $50,000.

· More than 82 percent of NJRA members surveyed had emergency weather staffing plans and other site-related protection measures in place to ensure the safety of both customers and employees.

· Of the restaurants that were able to open, more than 53 percent were forced to open later than their normal opening time.

“Thankfully, Governor Christie is committed to cutting state spending and scrutinizing the state budget by taking a realistic look at tax collection-related revenues,” Dowdell added. “Unfortunately, sales tax revenues from restaurants are already down and – as our survey indicates – are likely to further decline as a result of the winter storms we’ve already experienced, as well as those that are likely to hit in the weeks ahead.”

The NJRA represents owners and operators of full-service restaurants, catering facilities, taverns and pubs, brew pubs, diner restaurants, hotel restaurants, coffee shops, limited and quick service restaurants, institutional feeders, delis, pizzerias, country clubs, culinary students and schools. Today, the New Jersey restaurant and hospitality industry includes 23,000 eating and drinking establishments generating $12 billion in annual sales and employing 311,000 people. Visit www.NJRA.org.