Industry Survey Results

One of the most important things we can do as an association is listen to our members, and our recent MLBA Member Business Survey gave us a very clear picture of what many operators are experiencing right now. We received responses from businesses across Michigan, with most coming from bars and restaurants. While this is a snapshot of our membership rather than a scientific survey of the entire industry, the results were remarkably consistent in showing just how much pressure operators are facing.

When we asked members to compare the financial health of their business with one year ago, 60.9% said their business was either somewhat weaker or much weaker. Only 10.9% said they were stronger, while 28.3% said they were about the same. Those numbers help explain why so many of the conversations we are having with members today revolve around controlling costs, maintaining customer traffic, and protecting already-thin margins.

The pressure is coming from nearly every direction. Food costs were identified by 80.4% of respondents as one of the greatest challenges facing their business, followed by employee wages and labor costs at 71.7%. Insurance costs were cited by 60.9%, declining customer traffic by 58.7%, utilities by 54.3%, and customers spending less by 47.8%. Credit card processing fees were also identified by 43.5% of respondents, while 41.3% pointed to staffing shortages and 37% cited paid leave and other employment requirements.
Those pressures are not simply showing up on a balance sheet. They are changing the way businesses operate. Nearly four out of five respondents, 78.3%, said they had increased prices during the past 12 months. Another 43.5% had delayed equipment purchases, renovations, or expansion, while 39.1% had reduced staff or employee hours. Nearly 35% said they had used personal savings to support the business, 30.4% had reduced days or hours of operation, and nearly one-third, 32.6%, had considered selling their business.

The longer-term numbers are just as important. More than half of respondents, 52.1%, said they were moderately or very concerned about the long-term financial viability of their business, and another 41.3% said they were at least slightly concerned. When asked about the possibility of permanently closing within the next two years, 17.3% said it was somewhat or very likely, while another 26.1% were unsure. At the same time, 87% of respondents said they had already seen at least one bar or restaurant in their community permanently close or significantly reduce operations during the past year, including 50% who said they had seen several.

The written comments added even more context. Members repeatedly described slim profit margins, rising labor and food costs, higher utility bills, staffing challenges, declining traffic, and customers becoming more cautious with discretionary spending. Several emphasized how difficult it is to absorb one more cost when so many expenses are rising at the same time. One member described the situation simply as “less business and higher costs,” while another noted that food prices are changing so quickly that constantly repricing and reprinting menus is not realistic.

For the MLBA, these results are extremely useful. They give us hard numbers to go along with the stories we hear from members every day, and they help us better communicate the condition of the industry to lawmakers, regulators, the media, and the public. They also help us determine where our time and resources should be focused, whether that means advocating on labor policy, utility and insurance costs, credit card fees, regulation, or other issues affecting the day-to-day operation of our members.

Most importantly, I want to thank everyone who took the time to participate. These surveys are only valuable when members are willing to share what is happening inside their businesses. The more information we have, the stronger our ability to represent the industry and make sure policymakers understand the real-world impact of the decisions being made in Lansing, so please keep an eye out for future surveys.

The message from this survey is clear: Michigan’s hospitality businesses remain resilient, but many are operating under significant financial pressure. Our job at the MLBA is to make sure those concerns are heard, understood, and reflected in the work we do every day.