Political Problems Affecting the Restaurant Industry

If you own a restaurant, you will do well to understand that the industry does not operate in a vacuum. Whatever happens in the world of politics can have some kind of effect on business including the restaurant and the general food industry. Some of the political factors affecting the food industry may immediately be felt in the short term while others may be felt in the longer term.

Whatever happens out there in the world of politics can affect aspects of your restaurant business, including customer satisfaction, payroll, profits, and even your menu.The restaurant industry as a whole and some restaurant owners, in particular, like to monitor the world of politics, so they know which ways incumbents and incoming politicians lean. They have trade groups and lobbying groups that lobby for the interests of restaurant owners and they fund the politicians that will cater to those interests.

As in any industry, restaurants will typically support those politicians and political candidates who then give them a voice to talk about the issues that affect them and support policies that can benefit the restaurant industry.

Lobbying in any industry can turn out to be a negative thing for the consumer. Some food industry representatives will try to do their best to ensure that the status quo remains as long as it benefits restauranteurs. They may try to stop or weaken food policies that can negatively affect restaurant owners’ bottom lines, even if those policies are in the best interests of the general population.

When a policy victory occurs that can hurt the restaurant industry, restaurant industry lobbyists may try to influence funding so that the agencies in charge of implementing the policy don’t receive funding needed to carry out the legislation. In these instances, the legislation becomes an exercise in futility and the status quo remains in place.

An example of restaurant industry lobbying is the American Meat Institute which lobbies against policies that could reduce profit margins for meat producers and packagers. Such policies might include more stringent tests for bacteria in meat. Expansion of such testing could increase expenses for meat suppliers and packagers, thereby affecting their bottom lines.

On the other hand, without the bad intent, it is a good thing to monitor political goings-on as a way to know how to react as a restaurant owner to either comply or take advantage of the situation. A PEST analysis of food delivery and other aspects of the food industry shows that there are lots of positive policies and programs in the country that you can take advantage of as a restaurant owner to improve your bottom line while helping the nation achieve its overall goals. These include:

• obesity-fighting programs
  
• immigration reform
  
• affordable healthcare
  
• nutritional labeling
  
• many others

When election season rolls around, there may be some negativity in the atmosphere, and that might affect your restaurant business. When guests are worried about what the national budget will be like, they might end up tightening their own budgets and spending less when they dine out or putting a stop to dining out altogether.

It also probably won’t be a good idea to openly declare your political affiliations as a restaurant or even as a restaurant owner. That might end up alienating a section of your customers and ultimately affecting your bottom line. Instead, always focus on politically neutral causes, such as contributing to the local animal shelter or the veteran’s association or something like that.

As mentioned earlier, some players in the restaurant industry will go to great lengths to have the status quo maintained. They may try to put down policies that affect their bottom line even though those policies might ultimately be good for the country. You don’t have to be one of them.

When you deal with political factors affecting the food industry, think of ways you can turn it to your advantage. For example, a regulation that bans smoking can be used to help formulate your marketing strategy. You can position yourself as a restaurant that maintains a healthy environment free from smoke. If the government pushes for healthier foods, you can increase your offering to include healthier options.

The political climate can also affect your staff. Minimum wage hikes, for example, can have a significant impact on your staffing situation. You may have to incur some expenses as you try to comply with the law changes.

Nutrition is also a major topic in the political area, and often there will be a push for policies that can help people eat healthier food in restaurants. You can use this to your advantage and include healthier options in your menu as well as use healthier ingredients and cooking practices to prepare your foods. This can prove to be a powerful selling point.

Taxes can affect your restaurant business as much as any other politically charged element. It could be a direct effect, such as a direct tax on restaurants, or it can be more indirect. For example, the business meal tax deduction used to be 100 percent, which meant a lot of business people would have their official meals at your restaurant. The patronage propped up your profits.

When the deduction was reduced to 50 percent, that patronage likely became reduced, as it seemed less attractive to eat out on business meetings. This meant that your bottom line would be negatively affected. Other things include rules for credit card usage, tourism, sales tax, food donations, and so on, all of which may affect your restaurant business in one way or another.

Seeing as your restaurant will be staffed and run by people of different backgrounds and beliefs, it may develop a political climate of its own. Staff members will have their own viewpoints on political issues, and these may pop up in the course of operations.

As a restaurant owner, you should maintain a firm grip on the internal political atmosphere to avoid misunderstandings. The settings, hierarchy, policies, and overall work culture should be very clear to avoid political conflict.

You should also check in with your staff members as often as you can to ensure everything is in order. There will also be other things you may want to watch out for, such as local politics, including health inspection rules, local taxation, and so on.