Restaurant Industry Update & Outlook
Q2 2022 Market Update
SUMMARY: Industry recovery continues, tempered by concerns over inflation in the cost of food, supplies and labor, as well as stubborn staffing and supply chain shortages, and on-going pressures to adapt to shifting patron preferences and new operational norms.
PENT- UP “OPTIMISM” FELT IN RESTAURANT INDUSTRY
Pointing to a lasting shift in restaurant format, Consumers searching for
Phil Kakarikis, CEO and president of the International Foodservice Manufacturers Association: “Pent -up optimism, we can see some supply chain challenges seem to resolve themselves … everyone is seeing demand that has been pent -up start to emerge … how foodservice companies treat their people is key because this is all about how restaurants can fulfill their customer expectations and experience at the point-of-purchase. But nothing is going to be normal at any point in time, soon. The new normal is abnormal.” Nations Restaurant News
businesses with outdoor seating
continues to be above pre-pandemic levels increasing 292% in year two of the pandemic when compared to pre- pandemic searches. Y elp
HOWEVER, IN REALITY, AN INFLATION-DRIVEN RECOVERY
GHOST KITCHEN PHENOMENON ACCELERATING
Restaurant visitor volume remains below pre-pandemic levels and much of the growth as an industry is showing up through higher check totals (meal receipt amounts). Technomic feels this is not sustainable and will settle at some point or consumers will look elsewhere either by trading down (to less costly places to eat) or trading out visits with off-premise meal formats. Technomic
Chain concepts are investing further to gain the operational and investment returns delivered by Ghost Kitchen operational formats; Wendy’s over 700 locations; TGI Fridays over 300; facilities; Inspire Brands 700 locations; REEF launched an alliance kitchen housing all their brands to order from one app; Chick Fil-A testing concepts for their brand and other concepts. Technomic
SUPPLIES AND FOOD AVAILABILITY, STAFFING THE KEY ISSUES
SLOW RETURN OF BUSINESS TRAVELLERS IMPACTING PACE OF INDUSTRY RECOVERY
80% of restaurant have changed menu offerings due to food and product supply delays and shortages. And despite adding back 1.7 million jobs in 2021, seven of 10 restaurant operators report not having enough staff to meet current customer demand. Industry capacity for growth is being restricted by staffing shortages. National Restaurant Association , Technomic
Business travel not expected to recover until 2024. Full-Service Restaurants are dependent upon Business Travel and their recovery will not fully occur until Business Travel recovers further. Global Business Travel Assoc.
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