The State of the Restaurant Industry Mid-Year

Sep 17, 2021

Few events have caused as much devastation to the restaurant industry as the COVID-19 pandemic. 2021 saw some of the worst industry conditions stemming from unforeseen lockdowns, enforced closures, a crippled economy, and limited capacity.


According to the released 2021 State of the Restaurant Industry Report from the National Restaurant Association, we can measure the impact of COVID-19 on the restaurant industry, which is estimated to have lost about $240 billion in sales from a projected $899 billion. For many restaurant owners, few choices remained but to shutter their doors for good. In fact, Fortune reported that over 110,000 restaurants closed for business.


The 2021 State of the Restaurant Report delves into the current condition of foundational elements integral within the food industry, including technology, labor, menu changes, and more based on surveying over 6,000 restaurant owners. As destructive as the coronavirus was for many businesses, you would be hardpressed to find a single restaurant that wasn’t affected by widespread closures, dining restrictions, and adapting to new safety protocols.


Many consumers opted for off-premise dining and ordered from third party delivery services

State of Restaurant Industry in 2021

As stated in Forbes, the COVID-19 pandemic had a debilitating impact on the supply chain companies that keep restaurants and foodservice enterprises in operation. Accordingly, about 85% of food supply chain companies experienced a 30 percent reduction in revenues in 2020 than in years before.

In the first six months of 2021, fewer customers ate on-premises as COVID-19 surged throughout the nation. However, by mid-year, restaurant sales are expected to grow as more consumers get vaccinated.

In fact, total restaurant sales are projected to be around $789 billion, an almost a 20 percent increase from 2020, which is great and welcomed news!


Important things to note from the Report:

  • Wholesale food costs have increased at an incredible rate
  • Hourly earnings have more than doubled in the private sector
  • As of June, 11 states and Puerto Rico still have capacity limits on restaurants
  • 64 percent of customers prefer to order directly from the restaurant and not a third party service
  • Many restaurants focused on optimizing their off-premises dining services – for example, implementing curbside service
  • Many restaurant owners reported retaining and hiring employees was a top challenge throughout 2020 and 2021
  • Vaccination numbers and stimulus payments helped increase food and beverage sales in the first half of 2021, often resulting in increased takeout orders
  • Menu prices have increased to reflect the higher cost of food and labor
  • The restaurant industry has had to adapt quickly to survive, including selling alcohol to-go during the pandemic shutdown
  • During the early stages of the pandemic, the only option for many restaurants to continue selling involved off-premises curbside takeout and delivery, which remains a popular option over on-premises dining


New COVID-19 regulations and mandates required restaurant owners to quickly adapt, especially contactless pickups and delivery, to keep both staff and guests safe and healthy.

takeout and pickup
Restaurants adapted takeout, curbside pickup and delivery


By necessity, the pandemic endorsed new technology and contactless dining for many customers. More and more people are adopting takeout and delivery as part of their routine.


The road to recovery is long and uncertain, but it’s clear that employment and sales are rising slowly. It may take some time to nullify the damage caused by the pandemic shutdowns, but the restaurant industry has proven to be resilient and adaptable: two necessary qualities for survival.