The Washington, DC-headquartered National Restaurant Association’s 2021 State of the Restaurant Industry report addresses the devastating impact of the novel coronavirus pandemic (SARS-CoV-2) on the foodservice industry, documents the altered operational landscape, and captures consumer sentiment, influences and intentions for the coming months.
It also explores several crucial areas in which the Covid-19 health crisis forced restaurateurs to pivot and adapt, quickly adopting contactless technology, shifting most service to off-premises and outdoor dining, and adjusting labor levels and menus.
Based on data from responses to the Association’s survey of 6,000 restaurant operators across all industry segments, and the polling of 1,000 adult consumers, the report delivers impact data on sales and traffic, operational trends, food and menu developments, and workforce trends along with consumer purchase preferences and intentions.
The report offers a comprehensive and sobering look at the damage the pandemic caused the foodservice sector and millions of its employees nationwide. Several key findings:
•The restaurant industry ended 2020 with total sales that were $240 billion below the trade association’s pre-pandemic forecast for the year
•As of December 1, more than 110,000 eating and drinking places were closed for business temporarily, or for good
•The eating and drinking place sector finished last year nearly 2.5 million jobs below its pre-coronavirus level. At the peak of initial closures, the National Restaurant Association estimates up to 8 million employees were laid off or furloughed
The report offers extensive analysis on trends in several areas, as detailed below.
Restaurants looked at a number of different ways to retain traffic and generate revenues. Operators focused on building off-premises business, especially in the full service segment, with roughly half of restaurateurs devoting more resources to expanding that side of their business since the start of the Covid-19 outbreak in March.
Adding curbside pick-up, in-house and third party delivery and if possible, drive-thru capacity, and upgrading takeout and delivery packaging were just a few of means they used to sustain business. Service styles also changed. In addition to the off-premises focus, a big portion of on-premises dining moved outdoors for as long as the weather permitted. Tech adoption accelerated. Contactless and mobile payment options became crucial. Across all six segments –quick service, fast casual, casual, family, fine dining, and coffee and snack – some 40% of operators said they added tech solutions to their businesses.
Food & Menu
With a slowdown in business, and on-premises dining restrictions, many operators reduced inventories, streamlining menus and developing menu items they could make well with smaller crews. They also began selling meal kits, bundled meals and even groceries – whatever clients needed and were willing to buy. Customers sought out comfort foods, including burgers, pizza, pasta and Mexican specialties. The report lists best-selling items by full service and limited service venues.
Before the pandemic, the restaurant and foodservice industry projected it would provide employment for 15.6 million people in 2020, or 10% of all payroll jobs in the economy. But the impact of the coronavirus caused staffing levels to fall across all restaurant and foodservice segments, with restaurant employment below pre-pandemic levels in 47 states and Washington, DC. The report emphasizes these three key findings:
• 62% of fine dining operators and 54% of both family dining and casual dining operators say staffing levels are more than 20% below normal.
• There are nearly 2 million fewer 16-to-34-year-old persons in the labor force, the most prominent age group employed in the restaurant industry workforce.
• Restaurants got hit harder than any other industry during the pandemic, and will have the longest climb back to pre-coronavirus employment levels.
Consumer Sentiment and Intentions
Despite the pandemic, pent-up demand for restaurants remains strong. Customers have become used to ordering takeout, but indicate they really crave in-restaurant dining experiences. Nearly 8 in 10 adult consumers said their favorite restaurant foods delivered flavor and taste sensations that couldn’t be duplicated at home, and 6 in 10 said restaurants are an essential part of their lifestyles.
“Our research shows a clear desire among consumers to enjoy more on-premises dining at restaurants than they have been able to get during the pandemic,” said Hudson Riehle, the trade association’s senior vice president of research. “We’ve also found that even as the vaccine becomes more available and more customers can return to restaurants, they’ll continue to want the expanded off-premises options going forward. Both will continue to be key for industry growth.”
The report is free to Association members and non-member restaurant operators. Others may purchase it for $149. Click here to access the report.