Give the perfect (tax-deductible) gift this season!

December is upon us. The mall parking lots are packed and traffic is as thick as gravy. Finding the perfect gift for the people in your life can be a daunting task, as we well know. No doubt your list has family members, children and friends of various ages on your list. Some are those that have everything, need something specific or have a desire for an item they would never buy for themselves.

The most challenging by far are those dearly beloveds who buy what they want and need whenever they decide. For those who have it all, what can you possible do to wow them, move them to misty eyes or make them tell their friends?

Here is our favorite “culinary-related” idea—after all, we are the Louisiana Restaurant Association…

Bestow the culinary smarts. As the philanthropic foundation of the LRA, the LRA Education Foundation exists to enhance our community through expanded educational and career opportunities. The LRA administers the ProStart program, a two-year, culinary arts and restaurant management curriculum in more than 45 high schools in the state.

Over the last two years, the LRAEF has awarded $80,000 in scholarships to young, aspiring culinarians to study at the college level.  Twice annually, the LRAEF hosts a ProStart Teacher Training to further “educate the educators” bringing in notable chefs, professionals and speakers to inspire, coach and teach them best practices in the classroom and in the kitchen.

Make a donation in someone on your lists’ name and we’ll send them a special holiday note on your behalf. Of course, your gift if tax deductible. Win for you, win for them.

Have a delicious holiday season!

LRA SIF Members to receive $2.7 million in dividends next year

It's workers' compensation coverage renewal time for many restaurant and business owners and the Louisiana Restaurant Association's Self Insurer's Fund for Workers' Compensation (LRA SIF) should definitely be on your list to quote your coverage.

Here's another great reason too. The Board of Trustees for the LRA SIF, during their final board meeting of 2012, voted to return a dividend to eligible members in the amount of $2.7 million to members.

The LRA SIF will have cumulatively returned approximately $99.2 million in surplus dividends and safety dividends to eligible members, having returned all premium not spent on claims or administrative expenses to members since 1988.

For the 25^th consecutive year, there is a surplus in unused premium and interest income that can be returned to members. This surplus will be returned to eligible participants from the fund years 2010, 2009, 2008 and 2007 in April 2013.

“In the past two years, most of our workers’ compensation competitors have been implementing significant price increases,” said Stan Harris, President/CEO for the LRA. “In this time of rising claims expense, our recently announced rate decreases are a testament to the great safety practices and lower accident rates of our members. It is because of this that we are able to continue to return a surplus dividend to our SIF participants. Our SIF requires membership in the Louisiana Restaurant Association and we welcome more than 40 independent insurance agents who have joined our program and are utilizing it for the workers’ comp needs for their hospitality clients.”

For 31 years, the LRA SIF has established itself as one of the most secure and respected providers of workers’ compensation insurance in Louisiana. The fund’s continued and consistent commitment to servicing its membership on the highest level will help ensure its future.

To be eligible for a dividend, the member must be in good standing with the LRA and the LRA SIF and have a loss ratio that is equal to or less than 70 percent for the years declared as of March 4, 2013.

The LRA SIF is committed to responsibly operating a fund with its members’ fiscal health as a priority. In October 2012, the LRA SIF announced a rate reduction in the seven most impactful classification codes related to the hospitality industry, effective January 1, 2013. Those codes include: quickservice restaurants, bars, hotels, country clubs, drivers, food manufacturing and convenience stores. A similar rate reduction was also implemented in 2011.

To learn more about how the LRA SIF can help you reduce your workers’ compensation costs and to get a quote, call Babs Schultz at (504) 454-2277 today.

The Louisiana Restaurant Association is one of the largest business organizations in the state, representing restaurant operations and related businesses. The restaurant industry in Louisiana is one the state’s largest private employer, providing jobs to nearly 200,000 residents. Restaurants in Louisiana are expected to generate sales of $6.5 billion in 2012.                    

Consumer sentiment positive, bodes well for pinched restaurant industry

The National Restaurant Association (NRA) issued its 2013 Restaurant Industry Outlook earlier today, with the fitting theme of “2013: Finding Success in an Uncertain Environment.”

Average Americans, however, aren’t sweating the challenges that business owners will experience next year, according to the December Market Briefing Survey, “The Post-Election Mindset: Cautious Hope,”  by American Express. More than half of consumers surveyed said they expect the U.S. economy to brighten a great deal or somewhat in the next four years.  A brighter future means more restaurant visits.

Next year, Louisiana’s annual restaurant sales are projected to top $6.8 billion, a 3.6 percent increase over 2012’s $6.5 billion, according to the NRA. Nationwide collectively, the nearly one million restaurants will ring up a whopping $660.5 billion in sales, up from $379 billion in 2000.

When asked by Amex, “If your personal financial situation improves, how is that likely to influence your restaurant visits and spending?” 67 percent said they would visit restaurant in general more often. Thirty-seven percent said they would patronize full-service, sit-down restaurants more often.

With a sluggish economic recovery, all-time high food costs, the impending Affordable Care Act enforcement and the deadline looming to extend the Bush/Obama tax cuts to avoid the “fiscal cliff,” restaurants are bracing themselves for even tighter margins.

Making a profit is the goal of every restaurateur. If consumer spending increases, hopefully restaurateurs we’ll have a chance to break even despite the challenges ahead.

Restaurant industry will grow, outpace national job growth in 2013 despite sustained challenges

While the operating environment will remain challenging, America’s 980,000 restaurants are expected to post record sales and continue to be a leading job creator in 2013, according to the National Restaurant Association’s (NRA) 2013 Restaurant Industry Forecast released today. Total restaurant industry sales are expected to exceed $660 billion in 2013 – a 3.8 percent increase over 2012, marking the fourth consecutive year of real sales growth for the industry.

In addition, 2013 will be the 14th straight year in which restaurant industry employment will outpace overall employment. Restaurants will employ 13.1 million individuals next year as the nation’s second-largest private-sector employer, representing 10 percent of the total U.S. workforce.

“Despite a continued challenging operating environment, the restaurant industry remains a strong driver in the nation’s economy,” said Dawn Sweeney, president and CEO of the National Restaurant Association. “Ours is a resilient and flexible industry that continually finds new ways to keep growing, relying on the creativity and innovation exhibited by the entrepreneurial spirit. In 2013, restaurant operators will continue to explore ways of navigating the rocky economic landscape to find the road to success.”

“The fact that the restaurant industry will continue to grow in an operating environment that presents substantial challenges is a testament to the essential role that restaurants play in our daily lives,” said Hudson Riehle, senior vice president, Research & Knowledge for the National Restaurant Association. “Restaurants are offering products and services that consumers actively seek out and enjoy; an activity in which consumers are selecting to engage despite cash-on-hand restraints because it is an important component of their lifestyle.”

Workforce Outlook
Total U.S. employment grew at a rate of 1.4 percent in 2012, while restaurants added jobs at a strong 3.0 percent rate – more than double the overall rate. In 2013, the NRA expects the restaurant industry to add jobs at a 2.4 percent rate, nearly a full percentage point above the projected 1.5 percent gain in total employment.

Looking ahead, the NRA expects restaurants to add 1.3 million new positions in the next decade, pushing industry employment to 14.4 million by 2023.

Because of this strong growth in restaurant employment, labor challenges will start to reemerge next year. Recruitment and retention, which was a top challenge pre-recession, will make its way back onto restaurant operators’ radar as the U.S. labor pool is starting to become shallower; restaurant operators in all segments expect recruitment and retention to be more challenging in 2013 than in 2012.

Challenges and Opportunities
While the restaurant industry is expected to grow in 2013, operators will continue to face a range of challenges. The top challenges cited by restaurateurs vary by industry segment, and include food costs, the economy and health care reform.

After increasing steadily in the last three years, wholesale food costs will continue on an upward trajectory through 2013, putting significant pressure on restaurants’ bottom lines as about one-third of sales in a restaurant goes to food and beverage purchases. Because of these prolonged cost pressures, restaurant operators will continue to use creativity and innovation to drive out cost inefficiencies and increase productivity to not pass along the increases to consumers at the same rate.

The sluggish economic and employment recovery impacts consumers’ cash-on-hand situation, which in turn impacts restaurants as there is a strong correlation between consumers’ disposable income and restaurant sales. There is currently substantial pent-up demand for restaurant services, with 2 out of 5 consumers saying they are not using restaurant as often as they would like; with improving economic conditions that demand is likely to turn into sales.

Preparing for the implementation of health care reform will put additional cost pressure on some restaurant operators in the near future. One-third of a typical restaurant’s sales go toward labor costs, so significant increases in those costs will result in additional cost management measures to preserve the already slim pre-tax profit margins of 3-5 percent on which most restaurants operate.

Advocacy main reason for LRA existence, key to mission

There’s this saying by the Louisiana Restaurant Association President/CEO and recovering restaurateur Stan Harris about the government and your business that is worthy of sharing with you here: “While you think you aren’t involved with government, if you are licensed, permitted or regulated, government and politics are in you, whether you like it or not.”

LRA President/CEO Stan Harris advocates on behalf of
Louisiana's restaurant industry with elected officials
every day. However, he strongly encourages restaurateurs
to build relationships with their elected officials
and share their experiences of running a business and
creators of jobs for an even greater impact.  

Last week, the LRA weighed in on behalf of the restaurant industry on the swift push through of the Orleans Parish Water Rate Increase – a whopping 114 percent in eight years.

Although, the Council voted 5-2 to pass the enormous increases and we were unsuccessful in putting them off any further, we made our voice heard loud and clear. There is no doubt the Sewerage and Water Board has mandates from the EPA that must be met. How the additional and current infrastructure funds are used is important to the ratepayers.

The thing about politics is it doesn’t always come down to the issue at hand. The relationships with an elected official, preferably established well in advance of an issue, greatly come into play. Politics is all about negotiation, coalition building, reciprocal support and honesty.  And over time, we build credibility.

As a restaurant owner, keeping your council members, legislators and even your congressional members informed about what is important to you, how many people you employ and how much it costs you to keep your doors open is an ongoing process, not a one-off when the need arises. We must position our industry as a job creator and job provider, a purchaser of goods and services, who cycles money through the local economy.

By joining the LRA, your dues and contribution to the Hospitality Political Action Committee allows us to maintain relationships with elected officials year round. We use these relationships to assist you as a restaurant owner to find clarification on a particular issue you may have. On behalf of the entire industry, we are your watchdogs for onerous policies that require changes or proposed laws that would put the restaurant industry into a vice grip of more regulations.

Harris also likes to refer to our member’s misperception that it is the LRA’s job is to “put the genie back into the lamp.” It is so much more effective when we use our collective efforts proactively on an issue. As elected officials know that we are in fact paid to advocate on behalf of the restaurant industry, but when we able for an LRA member to present an issue or request (an “ask” in the political realm) to an elected official, it carries far more impact. We can provide the talking points or expert back-up to help present the ask.

But you, as an owner, have the power to influence them directly and drill down the numbers of our industry’s economic impact and as the state’s largest private sector employer, in a way that we that makes it difficult for them to ignore. When you tell your story, its real, it’s true and it’s effective.

Every elected official has member restaurants in their district. When you develop these personal relationships with your elected officials you want them to consider when an issue arises, “How will this affect Peter at Such & Such Restaurant?” Telling the story of our industry and raising its image as an industry of opportunity is something that all of us need to do every day!

Brace yourself for the "fiscal cliff"

By Stan Harris, President/CEO, Louisiana Restaurant Association

Stan Harris is a former restauratuer
and has more than 25 years of
experience as an owner of
multi-unit operations in a
number of U.S. States.

It seems hard to believe that another year is almost over. The year began with the election of over 40 new legislators (out of 144) and ended with a national election.

This week, I had the opportunity to visit with several members of the New Orleans area Legislative Delegation. Of note, the discussions entailed the re-districting borders for many of their districts and others statewide. The rationale for the re-districting was sugarcoated in many respects, when in essence much of it was done to skew the boundaries to the benefit or detriment of a particular incumbent.

When you turn on the news right now, on the federal level it’s all coverage of the impending “fiscal cliff,” or the mandated sequestration that implements across the board cuts to federal departments and programs.

More concerning to the business and restaurant sectors is the approaching expiration of the “Bush,” and now with the extension in 2011 renamed the “Obama,” tax cuts. Payroll tax rates will return to prior levels and marginal tax rates resulting in an immediate tax increase. The President and the Democrats on the Hill want to keep the rates the same for all but the highest earners and this is proving to be problematic without agreed upon reductions in entitlement programs which are unsustainable at current revenue levels.

The interesting part of this debate is that instead of being at home, Congress will remain in Washington looking busy but until a real compromise can be debated, I don’t see the “cliff” being avoided. There may be a quick extension for 60-90 days, but the spending reduction and tax rate discussion will take more effort.

With the continued rise in food costs, the implementation of the Affordable Care Act and the above mentioned, the restaurant industry’s future is one with an even tighter profit margin.