COLUMBUS, Ohio — Northeast Ohio has seen several restaurants close recently, including Brown Derby, Outback Steakhouse, Hooley House, and Melt Bar and Grilled.
However, despite the closures, Ohio Restaurant & Hospitality Alliance President and CEO John Barker says the industry is growing.
"The net number of openings is still higher than the closures," he claimed.
Barker told 3News there are several factors for the closure of restaurants. In the last two and a half years, he says costs of food supplies such as proteins and vegetables have risen 25% on average. Meanwhile, he added, labor costs are at an all-time high.
"Labor's up about 22% on average in the restaurant industry over the last two and a half years," Barker explained. "To put that in perspective, we've not seen those kind of increases in modern history."
According to Baker, the future of the restaurant industry is technologically driven. More restaurants have agreed to do takeout and are working with third-party delivery services. Also, restaurants are creating easy to use apps and websites to order food.
"It's very difficult for business owners to find a way to manage all this and remain open," Baker said.
Barker told 3News that each restaurant has a profit and loss statement. He says it will turn negative quickly because restaurants cannot sustain the increased costs of food and labor, while customer traffic is down, ultimately impacting their profits.
"Out of every dollar they make, they keep a nickel," said Barker. "You start looking at these costs coming in right and it quickly goes from making a nickel or making maybe seven cents if you're really good at it to now you're losing money."
Barker told 3News there isn't relief in sight for increased food and labor costs.