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Viewpoint - Bob Gershberg - December 2021

Onward and Upward 2022 The Restaurant of the Future Arrives Ahead of Schedule

by Bob Gershberg, CEO/Managing Partner Wray Executive Search

As we emerge from the exhaustive challenges of the global pandemic, many changes made to stay healthy and viable will shape the future. Digital and delivery are here to stay and will remain a growing factor industry-wide. According to the Boston Consulting Group, digital ordering is up to 28% of all orders compared with 10% pre-pandemic. Virtual restaurant brands run out of existing kitchens with menus designed for off premise dining will continue to flourish. Generally, 2022 will to be a year of continuing transition.

Rethinking the layouts of our restaurants will reflect the off premise trend. The traditional 70/30 split front of the house to back of the house will flip flop over the next few years. Drive-thrus and takeout areas will become more prevalent in better end eateries.

Based on research by Deloitte, the key trends that are shaping consumption patterns:

Ultimate convenience. Consumers always demand convenience, and in a more off-premises world, that means drive-through, takeout, and delivery are crucial.

Frictionless digital experiences. Tech-savvy consumers demand digital engagement from restaurants and want cutting-edge restaurant technology options that recognize them and know their preferences.

Heightened safety in the wake of COVID-19. Remote work models and crowd avoidance are among the trends reshaping people’s dining habits.

According to the National Restaurant Association:

  1. Food and beverage sales in the restaurant and foodservice industry are projected to total $789 billion in 2021, up 19.7% from 2020.

  2. Despite a steady trend of job creation in the first half of the year, eating and drinking places are still nearly 1 million jobs, or 8%, below pre-pandemic employment levels and the restaurants and accommodations sector have one of the highest levels of unfilled job openings of any industry.

  3. As of June 2021, 39 states and the District of Columbia had reopened to 100% indoor dining capacity; 11 states and Puerto Rico are open at varying capacities ranging from 50% to 80%.

  4. Six in 10 adults have changed their restaurant use due to the rise in the delta variant.

Labor and Food Costs Remain Top Challenges

Although seeing consecutive months of staffing growth, translating to a net increase of 1.3 million jobs in the first half of 2021, eating and drinking places remain nearly 1 million jobs or 8% below pre-pandemic employment levels. Operators also continue to grapple with higher input costs, with wholesale food prices increasing at their fastest rate in seven years.

  1. 75% of restaurant operators reported that recruiting employees was their top challenge– the highest level ever recorded by NRA

  2. The full service segment was down 626,000 jobs, or 11% below pre-pandemic employment levels; the limited-service segment was down 175,000 jobs or 4% in the same period.

  3. Menu prices will continue to rise to offset cost increases.

  4. 52% of adults would like to see restaurants incorporate more technology to make ordering and payment easier.

  5. 84% of adults say they favor allowing restaurants to set up tables on sidewalks, parking lots or streets permanently.

  6. A majority of adults in states that allow alcoholic beverages with takeout and delivery orders would like to see it continue on a permanent basis.

“The road ahead remains long. So, 2022 will continue to be a year of transition for the industry. Industry sales will continue to move forward, but the potholes will still be there in 2022. Consumers will continue to be very deliberate in terms of how they spend their food dollar,” says Hudson Riehle, senior vice president of research for the National Restaurant Association.

We are resilient folks in a resilient industry. Onward and upward!

Warm wishes from all of us at Wray for a wonderful holiday season. May all your dreams come true!

All the best,

Bob Gershberg |CEO|Managing Partner|

(727) 244-4113

Finding tomorrow’s leaders today!

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