Labor shortages cited as restaurants’ top problem
The National Restaurant Association reports that the industry recorded its seventh straight month of staffing increases in July, with a net addition of 1.3 million jobs during the first half of 2021. That’s the good news. But eating and drinking establishments still have 1 million fewer jobs, reflecting an 8% gap, from the pre-pandemic total, according to the association’s 2021 State of the Restaurant Industry Mid-Year Update. Three-quarters of restaurant operators, which includes many franchises, said that hiring staff was their No. 1 challenge as of June 2021.
Full-service restaurants had lost 626,000 jobs, which is 11% below pre-pandemic employment levels. The limited-service sector sagged by 175,000 jobs, or 4%.
But again there’s some good news to go along with the not-so-good stuff: Food and beverage sales in the restaurant and foodservice industry are expected to reach $789 billion this year. That’s a very generous 19.7% increase over the dismal numbers of 2020.
Loosened Covid-19 restrictions are responsible for a great deal of that bump. As of June, 39 states and the District of Columbia resumed 100% indoor dining capacity. Another 11 states and Puerto Rico are operating at 50% to 80% capacities.
Our outlook through the end of the year is one of cautious optimism.Tom Bené, president and CEO of the National Restaurant Association
“Faced with one of the most devastating and disruptive events of our lifetime, the restaurant industry has taken significant strides toward rebuilding over the first half of 2021,” said Tom Bené, president and CEO of the National Restaurant Association. Bené adds that “our outlook through the end of the year is one of cautious optimism.”
Here are some additional survey findings:
• Menu prices increased nearly 4% through June 2021.
• Wholesale food prices rose at the fastest clip in seven years.
• Technology has attracted a big-time fan base. The pandemic accelerated restaurant industry changes such as customer use of technology for online ordering, electronic payment and order pickup. More than half of adults (52%) want restaurants to incorporate more technology to simplify payment and ordering.
• Outdoor dining and alcohol-to-go may well stick around. A whopping 84% of the adults surveyed would like for restaurants to permanently offer tables on sidewalks, parking lots or streets. Most adults in states permitting takeout and delivery of alcoholic drinks want it to become a permanent option. These trends – dining outdoors and opting for take-out rather than dining in – tie in with an earlier National Restaurant Association survey, conducted in mid-August, finding that 60% of U.S. consumers had altered their restaurant habits in the face of the surging Covid-19 Delta variant.
“The trends from the first half of the year are promising, but a lot of uncertainty remains in regard to the Delta variant, consumer confidence and ongoing labor challenges,” said Hudson Riehle, senior vice president of research for the National Restaurant Association. “We expect restaurant pent-up demand will remain high in the coming months. However, in this state of flux, maintaining the availability of on-site dining with few capacity restrictions will be critical to keeping the overall sales momentum going forward, especially for full-service operators.”
Click here to download the association survey, which was released Aug. 31.