Unprecedented. Uncertain. Challenging.
You’ve probably heard these words more in the last few years than ever before, along with phrases like “new normal,” “supply chain issues,” and “labor shortage.”
It has been two and a half years since the coronavirus changed the world and about two years since many of us started to return to some semblance of “normal.” Depending on where you live, your restaurant may have stayed closed for longer, but the summer of 2020 was when most places began to reopen.
The past several years have been difficult for everyone, especially restaurant owners. As we mark two years since reopening in the pandemic, we’re going to look at the impacts the coronavirus has had on the food service industry, what has and has not changed as a result of COVID, and what takeaways and lessons we can learn from this experience.
Restaurant.org suggests that the food industry has been impacted by COVID more than any other industry.
It’s difficult to find exact numbers for restaurant closures, but the Washington Post estimates 70,300 restaurants have permanently closed due to the pandemic.
In a survey of Texas restaurants, University of Houston says 80% of restaurant owners have had to lay off employees, while 86% said they had to reduce hours.
The restaurants that did reopen are having trouble maintaining their staff. 70% of restaurants claim they do not have enough employees. At the end of 2021, the food service industry saw a quit rate of 10.2%, an unusually high rate.
Labor isn’t the only shortage challenging restaurant owners. 96% of restaurants say supply chain issues caused a delay or shortage of key beverages or ingredients in 2021. Halfway through 2022, many supply chain issues remain unresolved.
The Restaurant Revitalization Fund (RRF) granted $28.6 billion to restaurant owners across the country, but 170,000 applications remain pending. With Congress’s decision to not renew the RRF, these restaurants are at dire risk of closing.
Though the NRA projects that restaurants will see almost $900 billion in sales in 2022, when adjusted for inflation, this number is still below pre-pandemic levels.
The WHO estimates that 6.3 million people have died from COVID-19 worldwide.
So how do we recover from these losses? How do we survive and move forward into a post-pandemic industry?
Part of the answer may lie in technology and automation.
With labor difficult to find and maintain, many restaurants are turning to robots to fill their labor needs. We’re seeing more robots delivering—and even preparing—food. Robots are also less likely than humans to transmit germs.
Food delivery and curbside pickup grew in popularity during lockdown, when eating indoors was heavily restricted. Though we have returned to eating inside, some customers may continue to prefer eating in their own homes. We may continue to see more “ghost kitchens” and online brands as an alternative to the traditional restaurant structure.
And as budgets tighten for consumers, building customer loyalty is more important than ever. Branded apps, rewards programs, and other digital methods for staying in touch with your audience could be the solution to maintaining your customer base.
There is no one magic answer to recovering from the financial and societal impacts of COVID—it’s a slow and challenging process for everyone. The most important thing is to be flexible, to adapt with the changing landscape, and to persevere.
If you want more detailed information about the financial effects of COVID on the food service industry, check out these articles.