What has 2021 looked like for the restaurant industry so far? There’s been a lot of upheaval since 2020, and this year is all about picking up the pieces. But that doesn’t mean there’s no opportunity for growth. The pandemic forced consumers to change their behaviors. Some of those behavioral changes are here to stay, and they’re driving restaurant trends that can lead to growth. We’ve been regularly updating our COVID restaurant insights report since the pandemic began, and it’s definitely been interesting to see how things have changed – even just over the past couple of months. Here are the specific trends we’re watching this year.
Trend# 1: Sales are up, but traffic is not likely to reach pre-pandemic levels this year.
The good news: consumers are excited to eat out again. Our data shows that sales are up, and they are stronger than they were back in 2019. Yet, restaurant traffic still hasn’t recovered. This means that restaurants need to seize every possible opportunity to bring in revenue. Tracking your business metrics and benchmarking them against the rest of the industry can help you understand where you stand, and whether you need to make adjustments to attract the right customers.
Because of the pandemic, you can’t compare this year’s data to last year’s, as you normally would. To truly understand what’s changed, you’ll have to look at things differently. Download this guide to learn how to compare restaurant data in the wake of recent events.
Trend# 2: Delivery will continue to evolve.
Delivery went from a steadily rising trend to a must-have capability last year. It’s hard to predict how much, and how long, the increased interest in delivery will persist. And that raises questions around how much to invest in delivery technology and capacity. For instance, many restaurants are using dining space as a staging area for delivery orders. How long should those arrangements last? And should they make permanent modifications to the dining area?
Also, while many restaurants relied on third-party apps to handle their delivery needs, some businesses are starting to invest in their own. Creating your own delivery infrastructure gives you greater control over the customer experience. The question is, are these changes worth the upfront investment? In order to pivot correctly, restaurants need to continue to stay up to date with off-premise dining trends. Monitoring customer intelligence will help you gain insights you need to shape your strategy.
Trend# 3: More investment in ghost kitchens.
Speaking of delivery-focused investments, some restaurants are launching their own ghost kitchens as a cost-effective way to manage the high volume of delivery orders. There are a few different models for ghost kitchens: they can serve a single brand, or they can be shared by multiple restaurants.
Experts predict that they’re here to stay, but the model will continue to change. Creating your own ghost kitchen, or renting space at an existing facility, is a significant investment. It also requires a good deal of logistical planning. That’s why it’s one of the more interesting new shifts that experts are watching as the year unfolds.
Trend# 4: Staffing challenges will persist.
Perhaps one of the most unexpected byproducts of the pandemic is the staffing shortage. Despite high unemployment, many businesses are having trouble filling open positions, forcing restaurant owners to balance the recovery with labor challenges.
It’s an uneven trend, with varying causes. In addition to recruiting new employees, restaurants need solutions to keep current employees on board to avoid the high cost of turnover. Workforce intelligence helps restaurants make smart choices that allow them to meet demand, adapt to the new trends and reduce turnover, all while keeping costs under control.
Trend #5: Consumer habits have changed, but unevenly.
When it comes to consumer dining habits, it’s hard to pin down the new normal. Some consumers will continue eating at home more. Others will be eager to get out of the house and enjoy eating out again. Savvy restaurants will leverage consumer intelligence and guest intelligence to understand customer spending habits and satisfaction levels.
This information will help you understand where to invest your dollars, as your customers’ preferences evolve through the recovery. We continually talk to experts to understand the evolution of consumer dining habits and explore the strategies that restaurants are using to attract diners. Keep up with our events so you can stay in the know.
FAQs About Restaurant Industry Trends
Is the restaurant industry growing?
Unfortunately, the restaurant industry isn’t growing. According to the National Restaurant Association, the pandemic set the industry back to 2014 levels, in terms of sales. More than 110,000 establishments closed in 2020, many of them permanently. The good news is, it looks like the worst days are behind us and the rebound is here.
What drives the restaurant industry?
The factors driving the industry this year are customer experience (with a heavy emphasis on convenience), a rebounding economy and alternative models, such as ghost kitchens.
How large is the restaurant industry 2021?
As of January, 2021, the U.S. restaurant industry is worth $659 billion and employs 12.5 million people.
Which type of restaurant is most profitable?
Quick-service restaurants are outperforming the rest of the industry right now, with many experts attributing their success to off-premise operations.
Are restaurants opening back up?
As of June 2021, most restaurants across the country are back open for indoor and outdoor dining, have returned to normal hours, are allowed to be at full capacity (even in states such as California and New York where restrictions were very strict for the longest time) and no longer require masks. However, many restaurants are still not open at full capacity, not because of pandemic restrictions, but because of staff shortages.
Preparing for the future
Although last year was a whirlwind of change, it’s time to look ahead to the future. While no one can truly predict what’s in store for the years ahead, keeping up with the latest data will help you use these trends to your advantage. There are many factors impacting restaurant industry trends this year – from consumer habits to public policy. Keep up with the latest insights to stay one step ahead. Sign up for the Restaurant Industry Performance Pulse for weekly data on what’s new in the restaurant industry.