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State of the Restaurant Industry 2023

Mar 14, 2023

It would have been hard to predict how much restaurants would change over the last ten years, or even the last several years. Inflation, staff shortages, and illness have deeply affected everything from medical care to egg prices, and chances are if you’ve dined out, even semi-recently, you’ve noticed a big difference in your experience. Like everything since the outbreak of COVID, restaurants have had to pivot. It’s a new world for restaurants in 2023, but experts say there’s much to look forward to as well.

 

People Want to Go Out to Eat Again

 

Here’s some good news: People want to go out to eat again. They crave the dining experience and are willing to pay a little more for it. According to the National Restaurant Association, consumers are looking to spend their leisure time with family and friends, rather than cooking and cleaning up. Restaurant operators have reported business is getting close to “normal” (pre-pandemic customer numbers), and their focus this year is sustainable growth for the future, says the article. Many consumers seek bargains, loyalty programs, and discounts when dining out; however, Gen Z and Millennials  are the two groups most comfortable with their steady or growing finances this year. They are more likely to spend their money on entertainment and dining out, says QSRmagazine.

 

eating

 

In addition to that good news, here’s some more: the foodservice industry has been predicted to earn $997 billion in sales in 2023, says the National Restaurant Association. This is due in part to the rising prices on menus. The downside, though, is that most restaurant owners and operators are worried about high food costs that affect menu prices and portion sizes, says QSR.

 

High Food Costs are Top of Mind

 

High food costs are at the forefront of restaurant owners’ minds, and, unfortunately, there are some things that will make 2023 challenging for the foodservice industry. Since the lockdown in 2020, finding food service workers has been difficult. Not much is going to change in that way, says Restaurant Dive. According to the National Restaurant Association food service jobs are estimated to grow by 500,000 jobs by the end of the year. The dip in help has left owners and operators zeroing in on efficiency, and is likely, in the near future, that staffing will never look like it did pre-pandemic, says Restaurant Dive. That means more restaurants are implementing digital ways to reduce “front-of-house costs,” says the article, with pay-at-table options or tableside ordering, and even hiring remote workers for drive-thrus and walk-up counters. It also means giving staff more prep work before shifts alleviating some pressure during service hours.

 

Like many industries after the COVID outbreak, restaurants are slowly climbing their way back up. 2023 predictions aren’t nearly as stark as previous years, but they still present some challenges. Creative ideas, trying new methods, and leaving room for trial and error, are the name of the game these days. Restaurants across the country are stepping up to the plate.

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Restaurant Subscription Programs: What Customers Want

Feb 27, 2023

We’ve all heard of subscriptions; if you’re like most people, you subscribe to a few. There are streaming, workout, and even pet toy subscriptions… but have you heard of restaurant subscriptions?

Many restaurants now offer subscription services to keep their customers returning. It is a particular trend among chain restaurants like P.F. Chang’s and Panera Bread.

But restaurants want to ensure their customers think the subscriptions have value. So, operators need to tailor their subscriptions to the wants of their guests.

Regarding subscription services, customers want free food and special perks, delivery, and convenience

Free Food, Discounts, & Special Perks

Of course, the number one desire for customers is to receive more food for less. Many restaurants have seen success by offering exclusive discounts or freebies to their subscription members.

 

restaurant subscription

Panera Bread

Panera Bread offers an annual membership to its “Unlimited Sip Club.” The club allows subscribers to get free coffee every day. (Consider adding the cost/month as you did for PF Chang’s and others below)

Customers who subscribe to the subscription visit the chain eight times more monthly than regular customers.

According to Panera’s Chief Brand and Concept Officer, a quarter of all transactions now come from “Unlimited Sip Club” members.

 

P.F. Chang’s

P.F. Chang’s also offers a membership that is $6.99 a month. Members get special perks, like points for every dollar spent that they can exchange for free food.

The chain asked its customers what they wanted from a subscription service, and they stated that they wanted to earn points faster. Today, loyalty members get 10 points for every $1 they spend, and platinum members get 15 points for every $1. They can redeem 2,000 points for $15 to spend at the restaurant.

P.F. Chang’s members also receive priority on the restaurant’s waitlist.

Delivery

Even with the pandemic winding down, many customers prefer to stay at home. Restaurants that offer delivery to do better than restaurants that don’t.

In addition to receiving free drinks, Panera Bread subscribers get free delivery when ordering online.

Likewise, P.F. Chang members receive unlimited free delivery with their subscriptions.

Convenience

Sweetgreen is a health-focused chain based in Los Angeles. They have over 180 locations, and last year, they launched their “Sweetgreen” subscription program.

Loyalty members pay $10 monthly and receive a $3 credit per daily purchase.

With the number of locations this chain has, it’s easier than ever for loyalty members to stop by for a meal. Plus, healthy food is expensive. Receiving $3 a day towards a healthy meal can go a long way for someone trying to change their eating habits.

Gravitas is a Michelin-star restaurant in Washington. They offer customers a three-course takeout meal for two people for $130 a month. This offering is ideal for customers interested in enjoying premium cuisine in the comfort of their homes.

Conclusion

Rocket Money, a personal finance app, says that the average American had 4.2 subscriptions in 2019. In 2022, that number was up to 6.7. People are turning toward subscriptions more and more for added convenience.

More companies will likely turn to restaurant subscriptions to appeal to and retain their customers. But, if customers are going to pay for subscriptions, they want more convenience, better delivery, and more free food.

 

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Why are Food Prices Going Up?

Oct 04, 2022

Prices are high. And unfortunately, it’s no longer a surprise. From the gas station to the grocery store, people see prices up nearly 10%. Not only do these price increases affect individuals and families, but there are also significant consequences for business owners.

When it comes to an increase in food costs specifically, restaurants are feeling the pressure, too. The rise in grocery prices is reflected in other food providers – like the ones that supply restaurants across the country. So how are restaurants weathering the storm, and when will it end?

Increase in Food Prices

We often hear about inflation and higher prices, but it can be challenging to put those terms into perspective. Inflation is a part of most economies, right? It’s something everyone has to deal with and combat. So how does the current inflation compare to years past?

According to the U.S. Labor Department’s Bureau of Labor Statistics, in the last 12-month period (ending in August 2022), overall inflation is up 8.3%. That may seem reasonable or even manageable, given the previous few years. But the number is more startling when we break down inflation by category (i.e., food, energy, etc.).

Food inflation, for example, has increased to 11.4% over that same 12-month period. That’s quite an increase. But this number can be divided even further. There are often two food categories to consider – food at home and food away from home.

Food at home looks at the inflation rate at the grocery store. This category is seeing the highest level of inflation – 13.5%. This increase means American families have the highest grocery bills in almost three decades.

 

food costs increases

 

The outlook is only slightly better when looking at food away from home. This includes fast food, sit-down restaurants, and convenience store snacks. Here, the inflation rate is up 8% over the last 12 months. Not only are the food away-from-home prices causing problems for the consumer, but restaurant owners and employees are feeling the impact.

Reasons for the Increase in Food Prices

When prices start rising, the first question is often, why? The trouble with the current food crisis is identifying just one cause. The ever-increasing food prices are a combination of many issues.

Not only are the world market and supply chains still recovering from the global pandemic of 2020, but several climate issues are contributing to the increase. The United States was hit with severe Avian flu this year, meaning there are fewer chickens to lay eggs. Brazil also saw record droughts this year, which has affected the coffee crop. To top it all off, the Russian invasion of Ukraine has caused an extreme spike in wheat prices.

All of this makes it difficult to keep up with the demand for food. With a shrinking supply, a greater demand drives prices even higher. The worst part? Food is essential. Consumers can’t simply stop purchasing food until prices start to fall consistently. It’s a perfect storm. And the result is higher prices across the board.

Effect on Restaurants

No area of the food industry is unaffected by these price increases either. Restaurants, for example, are forced to reevaluate how and what they offer customers to stay ahead financially. In many areas, restaurants keep costs consistent but shrink portion sizes. Pizzas and burgers, usually considered the most affordable restaurant options, are getting smaller and smaller. Many consumers have taken to calling this phenomenon “shrinkflation.”

It’s not all bad news, though. Some experts are expecting restaurants to fair better with the high inflation rates. Because the cost of food away from home is still cheaper than food at home, many believe restaurants will see a boost in business – possibly even to pre-COVID levels.

 

Menu Reengineering

Inflation is here to stay, at least for the foreseeable future. It’s a time to prepare and get creative, including analyzing and reengineering your restaurant menu.

There is a silver lining, though, because as the saying goes, “what goes up, must come down,” and we hope that includes food prices.

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Menu Price Inflation: The State of Rising Food Costs for Restaurants

Sep 26, 2022

According to the Consumer Price Index Report from the Bureau of Labor Statistics, food prices are up 11.4% from August 2021 to August 2022. Government officials have noted global events such as the pandemic, drought conditions, the war in Ukraine, and the sanctions imposed on Russia as the defining events of these historically high inflation increases.

egg prices

Across the Board

Inflation has affected virtually all the food supplies. The price of meats, poultry, and fish has increased by 8.8%, fruits and vegetables are up 9.4%, milk is up 17%, and the price of eggs has increased by 39.8%.

Consumers are trying to cut corners when purchasing food in grocery stores, and so are restaurants. Unfortunately, restaurants have had to raise prices on their menus to try and offset some of their higher food costs.

 

Menu Pricing is Increasing

This year, restaurants have needed to increase their menu prices by 9% to keep up with the increased food costs and employee wages. These price increases may continue for a while, which will undoubtedly cause a strain on the consumer and the restaurant owners.

The menu price increases have not kept up with the increasing rate of food costs. Many restaurants absorb the added expenditures, so they don’t alienate their customers by increasing menu prices too much.

An excellent example of restaurant owners’ dilemma is the price of French fries that many establishments offer on their menus. In many locations throughout the United States, the price of a 30-lb box of french fries has almost doubled; however, most restaurant customers would not pay twice as much for their fries.

 

Compromise Pays Off

Consumers understand the increased cost of food because they shop at the grocery store and have experienced the financial squeeze. When dining at a restaurant, patrons know they are paying its food and operating costs; however, it is apparent the restaurants have tried very hard to keep reasonable menu prices.

The difference between a steak dinner at home and ordering one in a restaurant is only a few dollars. At today’s costs, a salad topped with a chicken breast, can be less expensive with less waste, by ordering it in a restaurant.

Restaurants represent more than a place to eat for most customers–it also represents an opportunity to be with family and friends. Eateries also provide a place to experience first meetings, celebrations, and conversations. They also clean up afterward.

dining in 2022

 

Because of the pandemic, consumers have had little social interaction for a few years. The restaurants that have survived are struggling due to inflationary food and operating costs. Consumers can–and are willing to– continue supporting their favorite restaurants and employees by accepting an increase in menu prices for the convenience of eating out.

 

Menu Re-engineering

The present moment is the perfect opportunity to reevaluate your menu—what items are underperforming? Which are your most popular? Which items are costing you the most? How can you re-engineer your recipes to provide better margins? Going at it alone can be daunting, which is why Synergy is available for professional menu development.

 

You may also be interested in our article, Inflation and Restaurants: How to Respond.

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Tomato Products Like Ketchup and Pasta Sauce May Be in Short Supply Soon 

Sep 07, 2022

Dealing with food shortages isn’t anything new these days, and now, we’ll be adding tomatoes to the mix. Tomatoes are a versatile fruit staple in many people’s diets. But you might have trouble finding them in your local grocery store soon.

Why Are Tomatoes in Short Supply?

California is the world leader in tomato processing. It is also responsible for 25% of the world’s tomato growth.

Unfortunately, California is facing the worst drought the area has faced in the past 1,000 years.

Californians’ wells are drying up, and farmers have restrictions on their groundwater use.

Besides the drought and rising temperatures, farmers face other pressures threatening their crop production. Fuel costs have skyrocketed. They’re having trouble finding labor, and fertilizer costs have increased.

Ten years ago, it only cost farmers about $2,800 to grow and harvest tomato crops. Today, that cost has almost doubled to $4,800.

Not only that, but the demand for tomatoes has gone up. California’s tomato processors have seen a 10% increase in demand since last year.

What Does The Tomato Shortage Mean for You?

With the increase in demand and the shortage of tomatoes, consumers may soon be missing their tomatoes. What exactly does this all mean?

It will be harder to find tomatoes and tomato products in stores. This includes things like ketchup, pasta sauce, and tomato sauce.

It also means that the price for these products will go up. In fact, tomato inflation is expected to far outpace inflation of other foods in the U.S.

Market research shows a 13% increase in price for salsa and a 23% increase for ketchup in the past year alone. With the shortages, the costs are only going to continue to rise.

How Will Farmers Deal With Tomato Shortage?

 

Tomato Shortage

 

Almost all farmers in California are dealing with severe drought conditions. 40% of the state of California is considered under extreme drought.

Drought has been causing issues with tomato harvesting over the last several years. But, this year, it’s worse. Farmers don’t have the inventory to fulfill demand. What tomatoes are growing are coming out smaller.

Many farmers are cutting down on their other crops to create more room for tomato crops.

Some companies, like Heinz, have taken preventative measures to ensure they still have their product. To maintain production, Heinz is sourcing tomatoes from other regions. They are also breeding new tomato seeds with stronger resistance to climate troubles.

Tomato shortages are unfortunate for both consumers and farmers alike. Tomatoes are a staple in many consumers’ diets, so the shortage and price increase will be hard on many people, not to mention abundant on restaurant menus. Farmers are struggling even more because their yield is down, but their cost is up. With droughts and extreme heat becoming all too common year after year, we’re going to have to think of new ways to keep our crop production thriving in the future.

What Can Restaurant Owners Do? Menu Redevelopment is Key.

Operators must consider building the cost of free condiments into their menu prices. Also, given these new realities, it’s wise to revisit your menu prices where tomato products are used. If you need professional help in redeveloping your menu, please reach out to Synergy.

 

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Beef Prices are Expected to Rise Even More: What Restaurant Owners Need to Know

Aug 15, 2022

Few people have missed the increase in prices. Everything from gas to entertainment and even food prices are on the rise. Perhaps the most painful increase is the steady rise in food prices. While all types of food are more expensive now, many people are concerned with increasing meat prices.

The spike in meat prices is hurting everyone. Not only are families trying to find ways to cut the weekly grocery bill, but restaurant owners are finding it challenging to provide meat dishes – specifically beef – at affordable prices.

What’s causing the increase in beef prices?

What’s most concerning is the rate at which farmers sell their cattle herds. According to Outsider, farmers across America are selling their cattle at an alarming pace. A lot of the sold cattle is meat stock, but there has been an increase in the number of breeding cattle going to market.

The more breeding stock farmers sell, the fewer calves will be born. And fewer calves mean less meat available to buy. It’s a dangerous cycle but farmers are forced into with the climbing prices and continued drought conditions.

surge in beef prices

Who’s feeling the effects?

The stress on farmers isn’t the only group feeling the pressure. Restaurant owners are also struggling with the increase in beef prices. These owners must reconsider a lot of their restaurant’s offerings in an effort to combat these prices.

Some people may assume the answer is to limit the beef options in restaurants. Pork and chicken are crowd-pleasing protein options. The truth is these prices are starting to climb as well. Soon the switch to pork or chicken won’t necessarily help owners save much.

Other owners have opted for changing prices or steak size. With rising beef costs, owners may choose to increase their prices meaning the consumer will bear more of the increased costs. Some owners try to be more creative by keeping their prices the same but decreasing the size of the steak – so less steak at a higher price.

 

beef prices on the rise

 

The solution for the price increase depends on the size of the restaurant operation. Bigger chain restaurants can help offset the beef increase by buying bulk, but that’s not an option for smaller businesses.

This beef debacle may hit smaller restaurants the hardest. These owners don’t have the capacity, capital, or demand to buy in bulk or up their prices. For many, the only option is to omit beef options altogether.

This choice can help small restaurants’ bottom line, but it’s risky. Some restaurants make their name on beef – like barbeque restaurants. But even these restaurants are left to get creative in these challenging times.

The truth is, beef prices are up – like many necessity items – and aren’t going down anytime soon. The effects of the COVID-19 pandemic are still being felt. At the height of the pandemic, processing plants were faced with a significant labor shortage or forced to close altogether. These plants are still playing catch up, and it’s caused a cascading effect felt by everyone from farm to table.

Beef prices aside, consumers still want quality food at an affordable price. That means restaurant owners are left to get creative or change how they do business altogether. What are some ways of getting creative? This is where braising, smoking or using flat iron steaks, tri tip and other less used cuts of beef come in.

The past two years have been a time of almost constant change. Restaurant owners have learned to adapt, and the current beef crisis is no different.

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New California Minimum Wage Rates

Jun 30, 2022

The minimum wage for unincorporated areas of Los Angeles county will increase on July 1, 2022. According to the Los Angeles County’s Chief Executive, their new wages are based on a consistent 6.4 % rate increase, determined by the Bureau of Labor Statistics’ Consumer Price Index. The minimum wage will differ among cities.

According to Mayor Eric Garcetti, the minimum wage rate for the Los Angeles area will increase from $15 to $16.04 per hour. Announced on February 1, the increase is calculated from the Los Angeles metropolitan area Consumer Price Index and will increase annually. Mayor Garcetti’s efforts to establish fair wages are fueled by his determination to increase economic viability. Following the Los Angeles Municipal Code, Garcetti commented on his interest to “end poverty wages in Los Angeles,” noting that the “fight for better wages is far from finished.”

In other areas, the rate is different. The new wage will be $15.96 per hour in the unincorporated areas of Los Angeles County. The Minimum Wage Ordinance in 2016 established specific criteria to be met and is still in effect in 2022. For example, Los Angeles employers and workers in unincorporated areas must perform at least two hours of work a week, and employers must post an updated bulletin of new wage rates in a prominent location along with other organization postings. In addition, it is illegal for employers to retaliate, and employees are protected regardless of their immigration or work status.

Rate increases in other California cities include Berkeley ($16.32 to $16.99), Emeryville for small and large businesses ($17.13 to $17.68), Malibu ($15.00 to $15.96) for employers with 25 or fewer employees, Milpitas ($15.65 to $16.40), Pasadena ($15.00 to $16.11) for small businesses, San Francisco ($16.32 to $16.99), Santa Monica ($15.00 to $15.96) for small and large businesses.

 

CA minimum wages

 

California can be proud to be the first state to establish a $15 per hour minimum wage. It is also the most complex. With the new increase, jurisdictions are establishing new laws that will constantly change locally. While the federal minimum wage has not moved from $7.25 in more than a decade, some new California rates are determined by regular schedules, and others are determined by Consumer Price Index (CPI). Rates are updated on January 1 and July 1, and there are no separate rates for employees who receive tips. A further list of cities’ rate increases is here.

The California minimum wage may go even higher, projected to rise from $15 to $15.50 in January 2023. This announcement came with Governor Newsom’s proposed $18.1 Billion Inflation Relief Package with the projection that inflation would reach 7%. With the continued inflation problems due to the pandemic, wages must also continue to increase. So far, this is what is happening.

Please stay connected to our social media and blog to keep up-to-date on changing laws related to the restaurant industry.

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Inflation, Wages, and Restaurants: What You Need to Know

May 24, 2022

Inflation has become a problem in 2022. It is at a 40-year high. It started with COVID –19 and related supply chain complications and has adversely affected significant businesses, including the restaurant industry. America has been anticipating a concerted effort from the government to relieve supply chain issues. Instead, the problem is getting worse. In a recent CBS/YouGov survey, 65% of Americans said President Biden wasn’t focusing enough on supply chain issues and subsequent inflation. His level of popularity has been plummeting. While Russia has attacked Ukraine, a major player in the world supply chain, the effects of inflation on restaurants have received minimal attention.

What Are the Solutions to the Inflation and Related Issues?

Raise the Wage Act of 2021 (HR 603) is one approach to provide a solution. This act increases the federal minimum wage to bring relief to American families. Five annual steps would raise the minimum wage from $7.25 to $15 by 2025. This would increase pay for nearly 32 million workers, about 21 percent of the U.S. workforce. The problem is that a federal standard does not comply with the standard of living in each state. The cost of living in San Francisco, California, is vastly different than in Miami, Florida. A $15 minimum wage floor is insufficient for providing real support for every location in the country.

Assembly Bill 1003 addresses wage theft according to the California penal code. In the past, employers have been sued or fined for withholding wages. Now employers can be held liable for grand theft if they intentionally withhold more than $950 from any employee, or $2,350 from two or more employees in any consecutive 12-month period. Withholding wages, gratuities, benefits, or other compensation, not paying minimum wage, offering overtime, or meal or rest breaks is a felony instead of a misdemeanor for an employer in 2022.

Relief for Restaurants and other Hard Hit Small Businesses Act of 2022 (H.R. 3807), addresses financial support for restaurants, arts and entertainment venues, and small businesses adversely affected by the COVID-19 pandemic. It passed in the House on 4/07/22 and will extend to 3/11/23, maybe longer. Made up of an additional $42 billion for the existing Restaurant Revitalization Fund, previous applicants who have not received a grant have priority. The Hard Hit Industries Award Program determines award recipients within the bill, with a maximum amount of $1 million being granted for each organization. Through this process, the Small Business Act (SBA) prioritizes organizations that have experienced significant pandemic-related revenue loss, prioritizing those that experienced a loss of at least 80%. The second priority is to those that experienced at least a 60% loss and last, a 40% loss. Funds may be used for operating expenses such as mortgage, rent, utility payments, and payroll.

 

restaurant relief act

 

In addition, the temporary practice of outdoor dining will continue. Many areas have noted the profitable impact outdoor dining had on the restaurant industry during the pandemic and are seeking legislation to allow it to continue. In Connecticut, Governor Ned Lamont announced House Bill 5271, allowing the rules on outdoor dining at restaurants established during the COVID-19 pandemic to continue for at least another 13 months. Approved in the House and Senate, these relaxed outdoor dining rules will continue to allow restaurants to impact the economy positively.

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Alcohol Shortage: What Restaurants Need to Look Out For

Oct 01, 2021

The pandemic forced many restaurants and hotels to adhere to changing rules and regulations creatively. Some allowed for drive-through drinks along with meals. Others started serving bottled ready-to-drink cocktails (think gin and tonics or margaritas,) while others started delivering alcohol with boxed meals.

 

Recently, reports indicate there may be supply and demand issues regarding alcohol. A few states, including Ohio, New Jersey and Vermont, are currently experiencing liquor shortages  related to the pandemic. In some states like Pennsylvania, customers will be limited to two bottles of specific alcoholic beverages per day in liquor stores.

 

North Carolina liquor stores are putting up more and more “Out of Stock” warnings as the alcohol shortage spreads.

 

What Is the Reason for Alcohol Shortages?

pandemic shortage
Empty shelves during the pandemic

 

If you remember the great toilet paper shortage during the start of the pandemic, you might remember how some items were in short supply in our local stores. Apart from toilet paper, commodities like flour, hand sanitizer, furniture, lumber, and even homes were getting harder to find in stock.

Like these impacted goods throughout the pandemic, we are experiencing a shortage of liquor due to supply chain issues.

These supply chain issues include a shortage in truck drivers, warehouse workers, raw materials, and reduced manufacturing. Even finding staff for bars and restaurants can be challenging. If multiple kinks develop in the chain, it will eventually directly impact consumers and businesses. In addition, alcohol requires time to ferment and age, so it may take some time to see an increase in supply.

 

How This Affects Restaurants and Taverns

Many restaurants and bars are in the same boat as consumers. They simply cannot get the level of alcohol supply that they are used to receiving.

The current strain on the alcohol supply chain may take some time to be resolved, so businesses need

Some restaurants are stocking up on ready-to-drink canned cocktails or ordering alternatives to specific flavors and brands.

 

Canned cocktail
Canned cocktail

The pandemic has highlighted how the restaurant and hospitality industry has learned to adapt to changing tides, even now. New experimental cocktail menus will likely emerge that work with available and sourced alcohol. Other restaurants may choose to focus on handcrafted cocktails with local ingredients, which could kickstart a new economic trend of supporting local businesses and vendors.

It’s unclear how long this shortage will last as we head into the holidays, but you may want to enjoy your favorite drink now (while you still can!)

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The Current State of Restaurant Labor Challenges

Sep 14, 2021

The restaurant industry has faced many challenges as a result of the COVID pandemic. Many restaurants were forced to close their doors or operate at a limited capacity due to restrictions. According to Time Magazine, “one in 10 permanently closed.” The result? Nearly six million employees in the food and drink industry left or lost their jobs by April 2020.

 

With the introduction of vaccines and increased demand for dining, restaurant owners are eager to open at full capacity. However, a new challenge has presented itself in recent months—an industry-wide labor shortage. The situation has incited a heated debate among restaurant owners, experts in the industry, and researchers over the cause of this shortage.

 

Some say people don’t want to work because they’d rather receive unemployment or have become accustomed to being off work. However, research has shown that many workers switched industries to support their families during the pandemic, citing concerns for safety and lack of decent wages that make the risk worth it.

 

hire sign
A hiring sign touts “flexible schedule, great benefits, free sourdough!”

While the debate is likely to continue as to the cause of the labor shortage, restaurants should consider ways to retain their current employees and attract potential hires. According to a recent report by BlackBox, the top four areas of concern for potential workers are as follows:

 

Wages– This is not a new issue in the workforce. For far too long, restaurant workers have received low wages, skirting just above or below the poverty line, and are highly dependent on tips. Recently, many owners have attracted new hires by increasing wages, and other restaurants should take notice. Due to inflation, the cost of living has increased. Workers are not asking for much. They want a wage that affords them the ability to live comfortably, given the risk they are taking.

 

Promotions– Owners should also consider promotions for reliable and hardworking employees. In any industry, no one wants to take a job without any prospects for the future. Promoting within the company also helps retain employees, and it allows workers to feel valued. This is a win-win situation for employees and owners, making it no longer necessary to look outside the pool of workers that already exists within the establishment.

 

Flexible schedules– Everyone wants a flexible schedule, and the restaurant industry bend to allow it. Owners can work with employees adjusting to fit different schedules, attracting more employees to fill the positions, especially potential hires with children. If there are only full-time positions available, it might be helpful to post several part-time positions as well. In the current market, flexibility wherever possible is key.

flexibility
Workers want flexible schedules

Benefits– With many other industries offering benefits, restaurants need to follow suit. Healthcare is of utmost importance given the current state of the pandemic, and that alone may be enough to attract additional interest in the position. At the very least, paid time off should be offered. Owners should look at the return on investment. A couple of paid days off could fill a role, resulting in higher capacity and increased revenue.

 

Currently, it’s a job seeker’s market. Employers need to be open to current and potential hires’ concerns to fill the labor shortage. The good news is that 66% of workers say they would return given the right conditions. So what steps will you take to respond to this labor shortage?