“Hey! Who wants to go out to eat?” has been an often-asked question for the vast majority of American citizens. Dining out in restaurants has been a staple in American culture for more than one hundred years. So, what do we do when a restaurant doesn’t have the food we want, or they close? For many people, the first thing to do is ask why this is happening. As of 2020-2021, the short answer to this question is COVID-19. A more in-depth look can explain further.
Although it is a complex situation, the root of the problem is the supply chain
As COVID-19 infection rates spread among side-by-side labor-intensive workers, restaurants began to suffer. Agricultural production and meatpacking were particularly affected. Jobs such as field working, meatpacking plant production, food delivery, and retail became increasingly dangerous as infection and, potentially, death became a common concern. Several meatpacking plants closed, as this environment can act as an incubator for the virus to spread.
Nonessential workers stopped working because they lost their jobs when the COVID-19 stay-at-home orders were put into place. Essential workers stopped working when they became infected. Some people stopped working when the fear of infection became too great. The loss of these workers created a gap in restaurant industry processes. The problem of decreased number of workers extended from farmers to wholesale buyers to servers and restaurant owners. Adversely affecting production capacity, lack of workers hurt the restaurant supply chain despite policies to social distance and practice increased sanitization.
In addition, the risk of exposure to COVID‐19 changed the willingness of workers to accept jobs. Currently, supplemental hazard pay is in discussion with labor unions as an option for restaurant workers at some fast-food restaurants. There is hope that by increasing the wage specific to these jobs, workers will accept the jobs offered during the pandemic, and the restaurant industry may recover.
The supply and demand of international trade using ocean freight has experienced slower delivery times due to COVID protocols. Labor shortages and restrictions on vessels coming and going have created congestion in some countries’ standard pickup and delivery procedures. As of August 18, 32 cargo vessels were waiting at sea to unload at the Port of Los Angeles. This backlog of ships was due in response to the increased demand for imports via ocean freight carriers. In addition, transportation proved to be an obstacle, with a shortage of long-haul truck drivers and major railroads pausing new pickups for a week due to backup of railroad cars in the Midwest.
The restaurant supply chain has been severely fragmented due to COVID-19. While the world continues to find ways to rectify the situation, being patient while ordering your favorite food at a local restaurant may help.
As for restaurants, you may have to reassess your menu items to pivot during this still difficult time. Wingstop pivoted by creating a virtual brand (orderable online only) named, “Thighstop”—a menu that focused selling just chicken thighs. Selling these lower cost chicken thighs would help offset the rising costs of chicken wings.
Restaurant Owners: What do you do now?
Let’s talk. It’s a great time now to dig into operations, restaurant training, as well as menu optimization. Synergy Consultants has been helping foodservice operators through great times and tough times for over 32 years.