What are the macro economic trends that will impact Restaurants and more importantly Restaurant profitablity.
We analyse the big trends along with changes in technology, changes within the restaurant customer base and just as importantly – your team.
We put all these together to discuss what the big trends will be for Restaurants in 2022 and how you can benefit from them.
It’s the beginning of a new year and one of the things you should be focused on are the trends in the restaurant industry for 2022. You need to keep up and at least have an idea of where the market’s gonna be heading and what the trends are if you want to remain profitable through the year!
There’s two things that are really interesting from what we found – a lot of similarities in the trends between this year and last year, and honestly, nobody really knows! You can find a lot of blogs and podcasts online that talk about trends, but a lot of them are sponsored by food and food providers.
That’s not how we do things – we simply do our research and put the information out here for restaurant owners to learn and adapt to the changes that affect their businesses the most. We look at what’s happening within the industry, the feedback that we’re getting from the restaurants, and the macro-economic effects – the big moving parts in the economy.
What are we seeing within the industry?
● Continuous closures
A lot of restaurants have closed their doors and are probably never gonna re-open, and it looks like we are nowhere near its end. It’s a tragedy but overall, we think it’s going to be great for the restaurant industry.
Profitability has been a huge problem among many restaurants and the fact that there will be less, it has to be a good thing.
● Deliveries are here to stay
The pandemic has triggered most, if not all, to include delivery services in their restaurants and they are here to stay for a long time.
Many people are still working from home and the traffic that restaurants need to remain profitable are still not there and unlikely to get back to levels that they were before all this happened. People are now looking for more flexibility and would probably continue to work from home for the next couple of years.
● Employment issues
A lot of the migrants, especially when they don’t speak a lot of English, come to work at restaurants where they specialize in cuisines from their country so they would be able to communicate with the owners and some of the members of the staff. Migration has stopped for quite some time now and we are seeing its effects on restaurant employment too.
The halt in migration is putting a lot of pressure on many restaurant owners. Without the people they need, a lot of restaurants are short-staffed with heavier workload on their current employees, which is also causing challenges in employee retention. People get overworked and burnt out, triggering them to resign from their jobs.
● Dropping rent prices
We are seeing a lot of movement among restaurants in terms of location too. Some are moving up to better spots while some are moving to less expensive locations to cut down on their costs.
Rent prices have been dropping in some locations and many restaurant owners are seeing it as a great opportunity to make their businesses more profitable. Landlords fear their properties being vacant for uncertain periods of time and they are dropping their prices to find tenants.
● Supply chain problems
There’s also a significant rise in supply chain problems we’re seeing and it’s slowly beginning to affect the restaurant industry.
The trucking industry is currently experiencing employment challenges too, like many other businesses. This shortage in employment is making it harder for many restaurants to get goods delivered.
Another problem is urea shortage. Urea is a component of fertilizers used for produce and AdBlue – a diesel additive that helps protect the environment. It is becoming a huge problem everywhere because countries have stopped the export of urea to keep fertilizer and produce prices down, and the lack of it will eventually keep trucks off the roads.
One shortage leads to increasing costs for production and logistics, and increasing prices for fertilizer and produce.
● The effect of COVID on customers
COVID has highly impacted the lives of many people, including your customers. People aren’t spending their money on restaurants like they used to anymore, whether they’re the ones who have accumulated more money over these lockdowns or those who have been struggling to survive.
In addition to that, the psychological effect of the pandemic of people is making them want more value. Restaurants will no longer be chosen just because of the food they’re serving – people can make food at home. People don’t spend much of their time outdoors anymore and if they do, you need to be able to give them something that’s worth their money.
What are the trends we’re seeing in 2022?
● A change in labor management
This is probably the biggest trend we are going to see in the restaurant industry this year and it is going to impact restaurants in many different ways.
There’s a huge inability to source the labor that is required to run a restaurant, so restaurant owners around the world are looking at anything they can do to increase the number of people that they need in a shift while maximizing the revenue that’s coming in.
Some restaurants are paying more for people to come in, some are cancelling bookings, and changing or decreasing days and hours of operations. It makes managing labor easier but it puts a lot of pressure on generating income to cover fixed costs.
● Simpler menus
Since many restaurant owners are having challenges in finding skilled labor, we are seeing plenty of restaurants moving to simpler menus too. Restaurant owners find this one of the best ways they can have maximum throughput with limited labor.
Dishes that are more complicated and take more time are being cut off the menus because they don’t have the people they need working and they may not have the skills needed to be able to serve them either.
Having simpler items on menus are helping them make sure that they are still providing good customer experiences without compromising the quality of food they’re serving.
We’re also looking at a lot of automation to keep up with the demands, given the lack of staff. There will be a lot of automation for the kitchen, front-of-house, ordering, and many more.
More restaurants will move towards automating their processes mainly because it is going to help them decrease labor costs and it will solve the employment issue that many have been facing. If technology can help them get one job done, they won’t need to struggle in finding someone who can do it for them anymore.
We’re also bringing it back to talks that started even before the pandemic began about robots flipping burgers and smart appliances – lots of tools that can help decrease the time spent in preparing dishes. These ideas are becoming more reasonable today.
● The death of the shouty kitchen
Restaurant kitchens are usually some of the most intense workplaces you can ever be in. There’s a lot of pressure, stress, and shouting, but we are seeing less of that in 2022.
The labor market is very tight today. If a person is working in one of those kitchens, they can leave it for a place that pays better and has a better, more collaborative work environment.
Restaurant owners are really gonna have to put more work into building a better culture within the restaurant because it reflects in the product you put out. A better work environment and a better culture will put a smile on the face of the front-of-house and give better quality of food to the customers.
These are only some of the things you should think about as a restaurant owner if you want to retain your good people and remain profitable this year. This is the first part of restaurant trends in 2022 from our research and the feedback we received from many restaurants, and there will definitely be more to come.
Stay tuned for part 2 of restaurant trends in 2022 that we’re bringing to you so you can make sure that you’re going to have a better year than you had last year!
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