Contributed by Cheryl Young, Business Resiliency Counselor
2020 was a year unlike any other for the food service industry with most restaurants having to close their indoor dining operations for months. Some restaurants changed course and survived, while others weren’t so lucky and had to close their doors for good.
2021 and 2022 have had their challenges too. There are two main issues currently affecting the food service industry – the labor shortage and supply chain issues.
Labor Shortage
The National Restaurant Association conducted a COVID-19 Restaurant Impact Survey. The results are from September 2021. The findings are listed below:
- Nearly 4 in 5 restaurants are understaffed. Although the industry added back many of the jobs lost during the pandemic, most restaurants remain understaffed. Seventy-eight percent of operators say their restaurant currently does not have enough employees to support its existing customer demand. A solid majority of both full-service operators (81%) and limited-service operators (75%) say their restaurant does not have enough employees to meet customer demand.
- For most restaurants, staffing is significantly below necessary levels. Among restaurants that are currently understaffed, 83% of operators say their restaurant is more than 10% below necessary staffing levels. Thirty-nine percent of operators are currently more than 20% below necessary staffing levels.
This has caused many restaurants to limit hours either by closing an extra day or two during the week or closing for a week at a time to give their staff a needed break.
Supply Chain
The restaurant industry isn’t being spared from supply chain issues that are currently impacting many sectors across the economy. In a September 2021 survey conducted by the National Restaurant Association, 95% of operators said their restaurant experienced supply delays or shortages of key food or beverage items in recent months. Many restaurants have had to continually alter their menu offerings due to shortages.
Supply chain issues have also caused major fluctuations in food and supply costs. Restaurants operate on low margins, so increased pricing negatively affects their bottom line. To survive in this economy, restaurant owners need to continually monitor their financials and make adjustments, as needed.
What does this mean for the consumer? Most restaurants have already increased menu prices. Restaurants cannot absorb the additional cost of supplies or the increased cost of labor.
The National Restaurant Association reports that average wages for non-supervisory employees at full-service restaurants were $17.26 per hour in August, a 14% change compared to a year ago. If these trends continue, the consumer will have to keep digging deeper into their pocketbook to pay for a restaurant meal.
