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American consumers see drop in restaurant, retail quality from labor shortages, study finds

Poor service. Limited menus and inventories. Shorter hours of operation. The pandemic’s labor shortage has plagued restaurants, retailers and their customers, according to a new consumer survey from Premise, a global marketing data collector.

And the near-term prognosis is none too cheery, says former Wall Street trader Charles Mizrahi.

“Shortage of labor is a temporary problem because demand is decreasing as the economy slows,” said Mr. Mizrahi, founder of Alpha Investor. “Businesses will soon not be worrying about too few employees, but having too few customers or sales.”

Premise reported this week that 61% of U.S. consumers noted a decline in service quality at restaurants, 76% cited reduced hours of operations and 60% pointed out fewer menu choices since the start of the pandemic in 2020. Nearly half — 46% — said these changes have diminished their feelings about eating out.

Patrick Fahey, a manager at The Dubliner restaurant in Washington, D.C., said the popular tourist spot near Union Station on Capitol Hill has kept employees and customers “happy enough” by focusing on in-person service.

Hans Dau, CEO of the business consulting firm Mitchell Madison Group, said that retirements will have a long-term impact on these industries, the worker shortage “will be a temporary phenomenon, given the country’s attractiveness to the global labor and capital pools.”

“The tail-end of the baby boomer generation decided to retire early in the pandemic, buoyed by record stock market gains, while the GenZers started companies from home, funded by unprecedented levels of venture capital, both of which are good outcomes,” Mr. Dau said. “The overall labor participation rate today is back to about its historical trend line, and gaps in lower skilled jobs will be filled with a mix of immigration and automation.”

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