Each year, Modern Restaurant Management (MRM) magazine asks experts for their views on the state of the industry. Here are some of their insights.
- The restaurant industry once again proved its resilience in 2022 as it dealt with ongoing obstacles like inflation, supply chain, labor shortages and more.
- Over the past year, brands modified expansion strategies, leaned into new technologies and chose to invest more into their employees to keep up with trends, improve operations, win over customers and embrace company culture.
- It was exciting to watch guests return to restaurants this year and even more exciting to see how restaurants have adjusted operations to adapt to this new normal.
– Frances Allen, CEO of Checkers & Rally’s
"We have seen guest counts decline for most of 2022 and just now start to fluctuate upwards again, indicating that there is an industry challenge to balancing increased check growth at the expense of foot traffic. Technomic is forecasting that the industry’s total value will only be 90 percent of 2019’s value in real terms. Inflation has hidden the dramatic decreases in guest traffic and we anticipate this becoming a bigger issue with investors in 2023."
– Peter Boivin, Vice President and Head of Industry, Restaurant at Vericast
Restaurant owners will end 2022 with a sigh of relief after another tough year.
"Restaurant owners will end 2022 with a sigh of relief after another tough year. While sales have in many cases, rebounded, operators faced ongoing struggles from inflationary pressure on food costs, hiring and retaining staff, along with supply chain issues and availability of key items. These elements were not offset by topline sales gains so many felt the pressure on the bottom line in actual earnings.
On the other hand, operators have continued to embrace strategies to push back against the ongoing struggles and reposition themselves for success. They have added technology throughout the restaurant to offset labor hours. Operating hours often exclude the least profitable dayparts or days of the week, providing better balance for the restaurant lifestyle. Increasing menu pricing has helped to offset costs and so far, has continued to attract customers since grocery prices are outpacing the increases in restaurant tickets for dining out."
– Robin Gagnon, We Sell Restaurants
- 2022 continued to be a challenging year for the industry, with factors such as inflation and labor shortages impacting the bottom line.
- Thanks to our on-demand hospitality business model, we fared well this last year, and have been able to tackle labor shortages head on with the implementation of Service Leaders at each of our restaurants.
- If 2022 made one thing clear, it’s that consumers want a digital experience. We expect this will continue into 2023, and operators that don’t prioritize technology will be left behind.
- Hospitality will undoubtedly do well. The strong will get stronger.
– Scott Lawton, CEO & Cofounder, bartaco
"The past few years may have permanently altered the relationship between restaurants and their customers, but only some of those changes were negative. Customers now rely on new technology, like contactless payments, mobile apps, and self-serve kiosks to get the food they want and fast.
Restaurant and fast food brands turned to new marketing technology solutions to personalize the customer experience and create a positive brand impression at every touch point.
At the height of the pandemic, the restaurant industry was focused on providing services without human interaction but even with pre-pandemic human interactions returning, the industry must continue adjusting. In 2022 restaurant and fast food brands turned to new marketing technology solutions to personalize the customer experience and create a positive brand impression at every touch point.
Looking ahead, this new landscape creates the perfect opportunity to meet consumers where they are, typically on their devices, and incorporate enhanced personalization to drive loyalty."
– Alex May, Associate Director of the Travel, Hospitality, & Food Services Strategy at Movable Ink
- 2022 was another challenging year for the restaurant industry, providing businesses and consumers alike with a variety of obstacles to overcome including labor challenges, inflation, a looming recession, and more.
- Nonetheless, businesses continued to adapt and persevere through these obstacles. At Fogo de Chão, we focused our efforts on re-investing in the guest experience and adding more value to our customers’ everyday experiences. We did this through adding new premium cut offerings to our menu including Lamb Picanha, Bone-in Ribeye and Porterhouse, at zero additional costs for our guests.
- Additionally, we’ve extended our happy hour offerings to last all day, giving our customers the chance to enjoy beverages and bites at a reduced price, any time. It’s important to never falter on the guest experience, not matter the impact of environmental factors.
– Barry McGowan, CEO, Fogo de Chão
- Restaurants navigated a variety of challenges this year, from residual effects of the pandemic to inflation, labor shortages, supply chain, and more.
Consumers have come to expect the convenience of digital in all aspects of life, and it’s clear that they want to control their own dining experience.
- As consumers gradually returned to dine-in, this past year has demonstrated the importance of on-premise technology to day-to-day operations.
- Consumers have come to expect the convenience of digital in all aspects of life, and it’s clear that they want to control their own dining experience – a trend that will stick in 2023 and beyond.
– Tim McLaughlin, Founder & CEO, GoTab
"2022 was a year of transition for the restaurant industry. While it may seem like COVID-era policies like vaccine mandates were ages ago, they were still in place at the start of last year. Over the last 12 months, restaurants have continued reopening their doors and embracing a new normal – one that includes increased consumer demand and the need for technology to facilitate streamlined operations, evolving labor challenges and increased retention of these guests.
Consumers realized how important restaurants are, not just as a place for delicious meals, but an opportunity to establish and deepen their sense of community after years of missed connection. The pent-up demand to support local restaurants also came with increased consumer expectations, with diners looking for special experiences and offerings.
The introduction and implementation of technology tools allowed restaurants to meet heightened consumer expectations and deliver more unique and personal experiences to keep guests coming back in.
The National Restaurant Association stated that 23 percent of consumers would like to see restaurants incorporate more tech in the future to improve customer service, and more than eight in ten operators agree that the use of technology in a restaurant provides a competitive advantage. The pandemic accelerated both restaurants and consumers’ openness to incorporating technology at every part of the guest journey – whether on- or off-premise.
The introduction and implementation of technology tools allowed restaurants to meet heightened consumer expectations and deliver more unique and personal experiences to keep guests coming back in. However, higher input costs – from key ingredients to takeout containers – as well as a persistent labor shortage hampered the industry’s ability to provide this level of service and fully recover their core business."
"When we look back at 2022, two things stand out. First, we saw new habits were formed. Traffic and sales stabilized, though, in some cases such as drive-thru and the lunch daypart, traffic remains at lower levels compared to the big spikes in 2021 as restrictions were lifted and vaccinations became available. The second is pricing. Menu prices have consistently risen since 2021. In the early months of 2022, average price increases remained at about 10 percent. In June 2022, average price increase spiked from 10.7 percent increase YOY to 13.9 percent in July. It continued to climb but stabilized in September and October at slightly more than 15 percent.
Though we’re nearing the price ceiling we identified in late September, Revenue Management Solutions consultants believe customers are not yet ‘trading out.’ Value deals, innovation within the value menu and personalized deals can keep traffic flowing and strengthen loyalty despite inflationary pressures on both restaurants and consumers. "
– John Oakes, Chief Executive Officer of Revenue Management Solutions
"In 2022, we saw restaurants settling into the “new normal” of labor shortages and supply chain issues that first arose during the pandemic. We saw significant changes in restaurants’ hiring, automation, and staffing approaches. Increasing wages and inflation led to profit shortages for many restaurant sets despite the continued “boom” in online ordering and revenue growth since COVID.
We also saw a switch to match changing consumer preferences like healthy food options and dietary accommodations. Plant-based food options are no longer a trend but their own category, and we are seeing restaurants invest in this as a menu staple.
Plant-based food options are no longer a trend but their own category, and we are seeing restaurants invest in this as a menu staple.
With remote-work flexibility here to stay for many Americans, we saw a shift in consumer locations as people spread out to areas with lower living costs. The restaurant industry was not immune to these changes in population shifts. For example, restaurants' average prices in the South increased over the past number of fiscal quarters. Over the same time period, dining out in Florida increased by 30 percent."
– Jocelyn Taylor, Director of Client Partnerships – Restaurants, VDX.tv
"2022 was characterized by a “candidate’s market” and an even more intense competition for talent. As the US rose out of the peak of the pandemic, the most competitive restaurant labor market ensued, leaving restaurants more understaffed than ever before. Staffing catapulted itself as the forefront of a restaurant’s focus to ensure efficient operations. To get a step ahead of the competition and win in the “candidate’s market”, speed became the name of the game. Responding to candidates ASAP, scheduling interviews within 48 hours, and making offers on the spot – all tactics of which became essential to improve your chances of a hire. You have to move candidates through your hiring process faster now than ever.
Keeping up with speed in hiring, however, strained the already busy schedule of restaurant owners, operators, and GMs. Restaurants needed to adopt technology to accelerate hiring and onboarding, and automation of manual hiring tasks was key. Technology to meet candidates where they are (social media) and to communicate with candidates quickly (text message), became widely popularized methods for restaurants to find success in hiring."
– Vivian Wang, Founder and CEO, Landed
“The past 18 months have been one of the most difficult periods on record for the restaurant industry as store profitability fell by even more than during the Great Recession, and seemingly aggressive menu-price increases still lagged food-and-labor-inflation by a record-setting 500 basis points. But there is a silver lining: This negative pricing-power trend is expected to show signs of reversal into 2023, enabling most restaurants to claw-back most, if not all, of their profit declines that began in mid-2021.”
– Paul Westra, managing director of restaurant investment research at Capital One