Staffing challenges remain a primary pain point for restaurants, according to Reward Network’s latest State of the Industry report. Fifty-one percent of restaurant owners surveyed by the company say staffing is their biggest challenge right now, and one-in-five consumers say they’re experiencing longer wait times while dining out. The survey was conducted in May 2022.
The latest jobs report may be a cause for optimism, though. The restaurant industry expanded payrolls at a healthy rate in the first month of the year and was the economy’s top job-creating sector. The Bureau of Labor Statistics (BLS) reported eating and drinking places added 98,600 jobs in January on a seasonally adjusted basis.
Changes to the way the BLS calculates employment figures and classifies industries impacted the report’s historical data. The revisions put the restaurant industry much closer to returning to its pre-pandemic staffing levels. Restaurants accounted for 12.17 million jobs last month, down 1.3 percent from a peak of 12.34 million in February 2020.
Segment-level employment figures are delayed by a month, but data from December show employment across the full-service segment was down 6 percent versus February 2020. Staffing at quick-service and fast-casual restaurants was up 4,000 jobs, or 0.1 percent.
Restaurants are ramping up investments in technology as they navigate a challenging labor environment. Rewards Network cited online orders, automated reservations, and contactless payments as key areas of focus that enable less staff to manage an enterprise. Customers are embracing these technology-driven dining experiences, too. According to the report, they tend to spend 20 percent more when using technology to place an order.
“The pandemic has created intense shifts in how restaurant owners run their operations,” Gabe Grice, senior director of product at Rewards Network, said in the report. “Takeout/delivery business has become a large revenue stream. This is prompting restaurants to rely heavily on technology, like online ordering. Simultaneously, customers’ dining expectations have also changed since the pandemic. This is where we’re seeing a demand for elements like contactless dining, QR code menus, and loyalty rewards programs.”
Surveys conducted by Rewards Network found 79 percent of consumers say the ability to earn rewards impacts where they chose to dine. Nearly 60 percent of restaurant owners believe loyalty programs are just as important or more important than they were before the pandemic. The report suggests restaurants choose menu items with a perceived high value and low actual cost to feature as rewards.
Spotlighting lower-cost items is a strategy for dealing with food inflation. The overall Consumer Price Index for food increased nearly 11 percent from October 2021 to October 2022. Restaurant menu prices reached a 40-year high last summer, with full-service meal prices up 8.9 percent and quick-service meal prices up 7.4 percent.
Researching new vendors and renegotiating with existing vendors also are strategies for dealing with food inflation. When it comes to menu modification, restaurants may want to keep in mind which foods have had the highest price increases. At the top of the list is beef, followed by frozen or freeze-dried prepared foods, chicken, milk, butter, eggs, and fresh fruits.
