Restaurant Traffic Up, But Industry Faces Headwinds 

Since the beginning of the year, foot traffic to U.S. food and beverage establishments is up 41 percent, according to Zenreach data.

And with the weather getting nicer, vaccinations on the rise, and dining limitations slowly being lifted, restaurant traffic continues to soar.

Restaurant reservations, including diners who placed themselves on waiting lists,were up 46 percent in April compared with April 2019, according to the review site Yelp (and up 23,000 percent compared with April 2020, when most Americans began staying at home during the pandemic, The Washington Post (May 20)

In some regions, restaurant traffic has blown by pre-pandemic levels, prompting industry experts to draw parallels between now and the Roaring ‘20s, which followed the 1918 influenza pandemic, bringing boom times for restaurants and other parts of the hospitality industry.

“Retailers should leverage these cues to start planning their ramp-up strategies: whether it’s expanding business hours, re-hiring, or picking up marketing efforts. Barring any unforeseen setbacks, we anticipate that these trends will continue to gain momentum moving forward,” Megan Wintersteen, vice president of marketing at Zenreach, said.

Finding workers easier said than done

Perhaps the biggest challenge in this new restaurant paradigm is staffing them.

Generous pandemic-related unemployment benefits continue to cause restaurant worker shortages. Further, existing workers are signaling they may step away from the industry. In fact, 53% of U.S. restaurant workers have considered leaving their job since the start of the pandemic with low wages and tips, safety concerns, and harassment from customers cited as the primary reasons, according to One Fair Wage and the UC Berkeley Food Labor Research Center The Guardian (May 14).

With that, some restaurants have taken aggressive steps to bring in prospective workers. From hosting job fairs and raising hourly rates to signing bonuses and tuition aid, restaurant owners are getting creative. In April, a McDonald’s location near Tampa, Florida began offering job applicants $50 simply to interview with the restaurant.Owner Blake Casper said he hadn’t had this much trouble finding employees in over 20 years (FOOD & WINE).

Supply chain and inflation concerns

With Americans returning to restaurants, there are new strains in food supply chains. In fact, the food sector is seeing a version of what supply-chain experts call the bullwhip effect, where companies that have pulled back their operations seek to rapidly scale up on signs of improving demand, leaving suppliers scrambling to keep up.

Inflation may also curb Americans’ desire to eat out. Per the April Consumer Price Index, food away from home —a proxy for restaurant inflation – rose 3.8 percent over the last year, more than three times food at home figures.