A recent study found two-thirds of seasonal workers ages 16 to 34 plan to look for temporary work during the holidays.
Going into a restaurant and seeing “Help Wanted” signs is something we, as patrons, see frequently these days. In fact, about half of full-service, quick-service, and fast-casual restaurant operators said recruiting and retaining employees was their top challenge in 2022, according to the National Restaurant Association’s 2022 State of the Restaurant Industry report.
And as the pandemic wanes and the holiday season nears, restaurateurs should consider ways to continue wooing prospective employees and keep the ones they have. This includes lessening their stress any way they can.
Challenges persist in the industry
Restaurant work is hard. I know because I used to do it. Servers, hosts, and food-prep staff spend long hours on their feet. Wages are improving but still low considering inflation, benefits are often minimal, and customers can be challenging, to say the least.
Most restaurants deal with understaffed shifts as soon as the holiday season begins—and sometimes staffing emergencies happen in the middle of service. It can be difficult for restaurant managers to keep loyal employees, especially during the chaos of the holidays.
Employers have made attempts to attract those still interested in restaurant jobs, but it is hard to create an enticing offering when budgets are tight.
To keep top talent and attract new restaurant workers, consider the following.
Provide flexible scheduling
Consider flexible scheduling because it can be difficult to get personnel at any time of the year, but especially around the holidays when restaurants are busier than usual.
A recent study found two-thirds of seasonal workers ages 16 to 34 plan to look for temporary work during the holidays but would prefer working in a retail store to foodservice. One of the main reasons is that retailers often offer employee discounts on merchandise.
Therefore, restaurants that don’t already should provide a free or discounted meal during a shift and also consider flexible scheduling of some sort to allow prospective employees to gain better control of the hours they work and give them time to enjoy holiday gatherings, too.
Offer on-demand pay
A benefit that is quickly gaining traction in the restaurant industry and beyond is on-demand pay. Employers can offer this solution through a paycard that’s as easy to use as a debit or credit card (minus the fees) or a convenient app, which also doubles as a financial wellness tool that tracks spending habits.
By providing on-demand pay, also known as earned wage access (EWA), restaurant employees can get ahold of their pay right after working a shift, which enables financial flexibility and eliminates the need to wait for payday.
In fact, 78 percent of EWA users said access to their wages before payday helped them pay bills on time and avoid late or overdraft fees. Further, 51 percent of people using EWA said taking advantage of the benefit helped them improve their financial health.
Offering EWA can help retain these employees and create a sense of loyalty. And if you provide it and your competitors don’t, it can help attract and retain much-needed holiday help—staff that might even stay around longer than peak season.
Increase staffing beyond the holidays
One of the most challenging tasks for restaurant managers is building a reliable and strong team while putting together an employee holiday schedule that suits everyone’s availability.
With the holidays nearly here, these tips should enable you to lessen employees’ and prospective employees’ stress. Doing so could very well ensure that everyone—staff and customers alike—can eat, drink, and be merry.
Sweet & Sour: The restaurant business has grappled with labor challenges for about 40 years now, but never a situation as trying as the current one. It’s time to rethink the very nature of restaurant work.
Peter says…
It’s been a while since we’ve climbed into the ring for our usual 10-rounder on some issue of importance to restaurants. After this give-and-take, any other issue might seem as trivial as the correct pronunciation of tomato. This time around, I’m arguing that the industry will suffer a devastating correction if it doesn’t completely trash and rebuild its labor model, and in double time at that.
The why’s are as evident as the Help Wanted signs choking out the We’re Open! notices on restaurant storefronts. The business has been struggling since the mid-1980s to recruit enough workers to sustain its growth, but never has the shortage matched its current proportions. The typical U.S. restaurant has shortened its business week by 6.4 hours since 2019 because it can’t staff all shifts, according to Datassential. That’s a full night of lost sales.
Chains on a growth tear say they’ve had to temper their site-selection and opening strategies because not enough potential hires are available in a choice market to handle the expected volume of guests.
The talent or effort required to produce a possible menu addition is getting as much consideration today as the product’s sales prospects. How can you sell something that you can’t produce, or at least not at a reasonable labor cost? No wonder menu shrinkage is carrying over so strongly from the pandemic, even with normal market conditions returning.
Meanwhile, restaurant workers are quitting at a volume and velocity the business world has never seen.
Most alarming of all, youngsters are showing outright disdain for restaurant work, a veritable rite of passage back in the teenage days of Baby Boomers and many members of the alphabet generations. The industry wouldn’t be the size it is today if it weren’t for the pools of high school and college students who needed jobs and were too green to find them anywhere but in foodservice. That social dynamic appears to be gone for good, courtesy of Uber and Amazon.
I could go on and on, but I’d better get in the queue for a table if I want to dine out. Seating abounds, but much of it is closed off because there aren’t enough staff members available to take orders.
At least I can watch the industry grapple with its reorientation while I wait. The industry’s ever-pressing challenge used to be drawing enough customers to make payroll. Now the essential mission is landing enough employees to take a shot at decent sales.
Yet much of the industry is pulling a Nero, fiddling away while the old restaurant model falters and smokes. The mindset seems to be that the business can ride it out until normalcy returns, helped along by labor-saving technology.
I’m convinced, given the public’s unprecedented disdain for the industry’s employment practices and standards, that normal is already here. It just looks a whole lot more discouraging.
Plenty of operators are trying to change the perceptions of restaurant work, but they’re not willing to address the core issues of pay and working conditions. Unless restaurants can change the belief among young people that foodservice jobs are barely more lucrative than running a lemonade stand, they’ll only want to work as servers or bartenders, if they consider the business at all.
The old rule of thumb was that labor costs should total around 30% of a restaurant’s sales. Until that rough guideline jumps closer to 50%, the industry will remain an employment option of last resort.
Sacrificing that much margin certainly won’t be pleasant, or easy. Less daunting should be the task of improving working conditions.
That doesn’t mean providing nicer break rooms or less ridiculous uniforms. The unionization drive that’s found traction during the last year or so has revealed two great truths about what would change the picture for potential hires. Sure, young people don’t want to put up with extreme temperatures, nasty bosses and an incessant grind. Those issues should be resolved pronto, even if it means significant investment.
But, as Starbucks and other organized coffee operations are learning, workers want their input on the business’ strategic direction to be at least heard and considered. And they also want the additional control over their own lives that comes with long-range scheduling. One of the demands posed by unionized employees to the Burgerville regional fast-casual chain was knowing what hours and pay they could expect two months hence. How else can they budget their time and income?
I don’t know of an off-the-shelf labor model that would be a perfect replacement for the current broken system. But I’d suggest the industry start looking at the setups that are used elsewhere in the world. Those approaches are unlikely to be a perfect solution, but investigating alternatives is a heck of a lot smarter than waiting for yesterday to come ’round again.
But what do you think?
Nancy says…
What I think, Peter, is that readers hoping to see some pugilistic fireworks will be sorely disappointed. You can unlace your boxing gloves and go back to your corner, because you won’t get a fight from me on this one. What you will get instead is an unhappy nod of agreement.
As you note, the labor issue has been a decades-long struggle, one that executives from the most innovative restaurant brands in the country have failed to address; I fear that now we are seeing the chickens finally coming home to roost.
The chickens in this case refer not to yet another onslaught of poultry sandwiches, but rather to the perfect storm of employment challenges that have beset the business over the recent past. I got a scary sense of the magnitude of the crisis at the onset of the COVID shutdown, when my neighborhood McDonald’s hoisted a sign at the drive-thru offering $10 an hour to start, while across the street the local Publix supermarket had set up a table to recruit labor at $15 an hour plus a nice benefits package.
Back in the day, as you point out, there was a virtually inexhaustible supply of teenage labor for whom the minimum wage wasn’t seen as exploitative. On the contrary, it was a handy way to earn pocket money to put gas in the car, or to buy the car to put that gas into, or to have a fun date night.
In the rush to build their businesses and set up their operating systems, it apparently escaped the attention of emerging-chain execs that the seemingly inexhaustible pool of teenage workers was, in fact, exhaustible—soon to be depleted by demographic, social and attitudinal changes.
By that time, the expectation of an endless availability of cheap labor became foundational to industry expansion; worse still, it was baked into growth plans of nascent national chains turning to the equities markets for necessary capital.
The resulting hiring-and-retention problems were recognized all the way back in the 1990s and gave rise to a comprehensive study called The Industry of Choice. Among the culprits fingered for employee dissatisfaction at that time were pay, scheduling and, most dispiritingly, acceptance of worker churn as the cost of doing business.
While it’s even more dispiriting to find how these issues have prevailed up to the present, I don’t think that we should lay the blame entirely on publicly-traded chains or the wolves of Wall Street. We should also acknowledge the important role played by others, notably our duly elected congressional stalwarts, who can be counted on to turn issues like immigration and minimum wage, both crucial to our industry, into political footballs that are punted away for a future resolution that never comes.
So, let’s cut to the chase here. You and I concur that the industry is at a tipping point, but I don’t entirely agree that unionization or a 50% labor cost are inevitable or viable long-term resolutions. Nor do I think we have to look abroad for answers, because some lie much closer to home.
And by closer I mean the West Coast, where regional powerhouse In-N-Out Burger has appeared on digital job site Glassdoor’s 50 Best Places to Work survey on the basis of an environment that is upbeat, enthusiastic, customer-centric and that, yes, pays above the national average and offers flexible scheduling.
You might argue that smaller brands like this one can be more flexible in competing with the bigger burger guys. But this September, White Castle, the Columbus, Ohio-based granddaddy of burger chains, was named to Fortune’s Best Workplaces in Retail 2022, the sole restaurant company among the 20 large employers who made the list. An extraordinary 80% of its 10,000 employees find it a great place to work based, they say, on the respect and recognition shown them. Proof of the power of this corporate commitment is the brand’s 25-Year Club, which has inducted 2,206 members who’ve hit that employment milestone with the brand over the years.
And now, Peter, we reach the part in our exchange in which we turn inevitably to Chick-fil-A, the contemporary chain juggernaut that seems to delight in subverting the status quo at every turn.
In this case, subversion comes courtesy of a franchisee in Miami, who boasts a 100% retention rate and receives truckloads of job applications. The reason: three-day workweeks of 13- to 14-hour days followed by four days off.
But wait, there’s more: Each worker is guaranteed an employee-pleasing seven consecutive days off per month. As a quick reminder, this is the chain that does north of $6 million in average unit volumes, is open only six days a week and is widely considered to be one of the very best operators in the history of the industry.
You’re right, of course, that there’s no off-the-shelf remedy for the labor crunch, but I do think there are restaurant examples that prove that these problems are not intractable. However, they took decades to develop and will require extraordinary will and creativity to remedy.
I may be a cock-eyed optimist, but I truly believe that there’s no challenge that can’t be solved with a steady application of foodservice operator innovation and foresight.
Self-ordering kiosks have grown to be a vital addition in the restaurant ordering industry. Despite not being a new addition, the popularity of the technology has grown immensely. Companies that have opted to incorporate self-ordering kiosks into their businesses have seen a steady increase in success, as the powerful features they offer can increase your customers’ average ticket-size.
Features of Self-Ordering Kiosks
Up-selling and Cross-Selling: Pasta and Cheese. Burger and Fries. Kev’s Red Beans and Rice. Tomatoes and Mozzarella. Butter and Corn. Some things just taste better together. Yet, often, many people forget that a simple add-on is all it takes to make their taste buds dance in delight. Or maybe they are unsure about what the perfect side would be. So how can you help your customers choose the best pairings? What can you say to convince them to try a combo or upgrade their meal? What is the best way to persuade them to order more to spend more?Self–ordering kiosks are your answer! The automated upselling and cross-selling prompts tempt your customers with even more deliciousness if only they pick a few extras. That is the secret behind increasing each customer’s average ticket size.
Increase in Average Check Size: A self-ordering kiosk is a revenue-generating tool that you can easily install in your restaurant. Studies have also revealed that self–ordering kiosks have increased the average customer ticket size by 20% to 30%. Customers are highly likely to accept the add–ons that the kiosk suggests. That is because self-order kiosks can offer the perfect drink or a side that your customers are sure to love and which makes sense with their choices. The kiosk can also make them eager to taste different add–ons each time. It will help to keep customers coming back to your establishment.
Minimizes Human Error :The self–ordering kiosk is the best tool to cover the shortcomings of the counter staff. Your cashier or the waiter might forget to up–sell your products to customers, but the kiosk will never forget its duty to prompt your product range.Further, self – ordering kiosks are a perfect tool to control the customer’s ticket and their meal. Normally, a waiter or your counter staff does not mention the price when upselling, so the customer has no idea about the total amount of the ticket. But, self–ordering kiosks show the total ticket amount with each add–ons, so that customers will not get shocked by an unexpected charge.
Comfort of Customizing Orders A kiosk is also a tool that makes your customer feel at home when ordering their meal because your customer will feel comfortable when ordering from a self–ordering kiosk. For instance, if they want to add extra cheese or extra sugar for their drink, he or she will not feel judged by the counter staff. They can also take their time while ordering at a kiosk without feeling pressured to rush in fear of wasting someone else’s time. This makes the customer spend more than they would when ordering at the counter.
Keeps Staff Comfortable Self-ordering kiosks help to optimize your staff. Especially during peak hours, on Friday nights and on busy Saturdays you can reallocate your staff to areas that are falling behind by leaving the kiosk to take orders and process payments. This also helps you to increase your revenue by earning extra dollars from your customer. Therefore, it is good to remember that automated up-selling and cross-selling techniques are all about Increasing the customer’s regular ticket size.
Wrapping up
It is clearly seen that there are many benefits that self-ordering kiosks provide for restaurant businesses. Despite it not being a new addition to the industry the popularity of kiosks has grown vastly over the past few years. If you want to see your business revolutionize into the new age of technology, this is your opportunity.
According to a new report published by UnivDatos Markets Insights, theRestaurant Management Software Market is expected to be Valued at 15 Bn in 2028 with a CAGR of around 16% from 2022-2028. The analysis has been segmented into Software (Front-End Software, Accounting & Cash Flow, Purchasing & Inventory Management, Table & Delivery Management, Employee Payroll & Scheduling, Others); Deployment (Cloud, On-Premise); End User (Full-Service Restaurant (FSR), Quick Service Restaurant (QSR), Institutional, Others); Region/Country.
The restaurant management software market report has been aggregated by collecting informative data on various dynamics such as market drivers, restraints, and opportunities. This innovative report makes use of several analyses to get a closer outlook on the Restaurant Management Software market. The Restaurant Management Software market report offers a detailed analysis of the latest industry developments and trending factors in the market that are influencing the market growth. Furthermore, this statistical market research repository examines and estimates the Restaurant Management Software market at the global and regional levels.
Restaurant management software is designed to be an end-to-end software solution to help users run their restaurants. In addition, the increasing acceptance of new restaurant service technologies and demand for quick service restaurant services are driving the growth of the global restaurant management software market.
The Restaurant Management Software Market is expected to grow at a steady rate of around 16% owing to the increasing revolution in restaurant technology is estimated to drive the market. Moreover, the growing use of technology to manage operations in the restaurant sector is driving the global restaurant management software market. More than two-thirds of restaurant proprietors were found to be adopting point of sales (POS) systems in a recent survey. Additionally, it was discovered that 90% of these businesses used restaurant management software to keep track of their inventory. These days, coffee shops and bars automate their procedures using the same technologies.
Some of the major players operating in the market include Clover Network, LLC, Personica (Fishbowl Inc.), HotSchedules (Fourth Enterprises LLC.), Jolt, NCR Corporation, OpenTable, Inc., Oracle Corporation, Revel Systems, Square Capital, LLC, TouchBistro.
COVID-19 Impact
The food and beverage industry were shaken by the onset of COVID-19. Since there were temporary closures and fewer dine-in guests because of the COVID-19 pandemic, the restaurant industry suffered. However, restaurants have survived the pandemic because of the use of Point of Sale (POS) technology, which offer contactless payment options. Because of the pandemic, a lot of eateries and packaged food businesses have switched to using online sales channels to meet customer demand. However, some norms have changed, like the heavy use of food delivery apps, the current popularity of contactless methods, and the use of restaurant management software.
The global restaurant management software market report is studied thoroughly with several aspects that would help stakeholders in making their decisions more curated.
Based on software, the market is segmented into front-end software, accounting & cash flow, purchasing & inventory management, table & delivery management, employee payroll & scheduling, and others. Front-end software category to witness significant CAGR during the forecast period. This is mainly due to the growing adoption of POS software for uses such as meal ordering, billing, payment processing, customer engagement, sales tracking, and reporting on order management.
Based on end user, the restaurant management software market has been classified into full-service restaurant (FSR), quick-service restaurants (QSR), institutional, and others. The full-service restaurant (FSR) category is to witness higher adoption of restaurant management software during the forecast period. Among these, the full-service restaurant (FSR) to hold a significant share in the market in 2020. In addition, FSRs have advanced technologies to improve table turn times and reduce labor costs, by which they can offer better customer service according to the demand of the customers.
North America (United States, Canada, and Rest of North America)
Europe (Germany, United Kingdom, Spain, Italy, France, and the Rest of Europe)
Asia-Pacific (China, Japan, India, and the Rest of Asia-Pacific)
Rest of the World
North America is anticipated to grow at a substantial CAGR during the forecast period. This is mainly due to the digitalization and advances in smart technology, such as automated point-of-sale systems, wireless payment methods, and virtual reservation systems in the sub-continent, which are to be blamed for the market expansion in the region throughout the projection period. Further, Restaurant management software is used by food service providers in the area for a variety of tasks, including managing menus, and tables, scheduling employees, managing kitchens, managing recipes, etc. As per QSR automation, around 72% of Americans dine at quick-service restaurants for lunch.
The major players targeting the market include
Clover Network, LLC
Personica (Fishbowl Inc.)
HotSchedules (Fourth Enterprises LLC.)
Jolt
NCR Corporation
OpenTable, Inc.
Oracle Corporation
Revel Systems
Square Capital LLC
TouchBistro
Competitive Landscape
The degree of competition among prominent global companies has been elaborated by analyzing several leading key players operating worldwide. The specialist team of research analysts sheds light on various traits such as global market competition, market share, most recent industry advancements, innovative product launches, partnerships, mergers, or acquisitions by leading companies in the restaurant management software market. The major players have been analyzed by using research methodologies for getting insight views on global competition.
Key questions resolved through this analytical market research report include:
What are the latest trends, new patterns, and technological advancements in the restaurant management software market?
Which factors are influencing the restaurant management software market over the forecast period?
What are the global challenges, threats, and risks in the restaurant management software market?
Which factors are propelling and restraining the restaurant management software market?
What are the demanding global regions of the restaurant management software market?
What will be the global market size in the upcoming years?
What are the crucial market acquisition strategies and policies applied by global companies?
We understand the requirement of different businesses, regions, and countries, we offer customized reports as per your requirements of business nature and geography. Please let us know If you have any custom needs.
Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Demand and Supply Side Analysis; Competitive Landscape; Company Profiling
Segments Covered
By Software; By Deployment; By End-User; By Region/Country
UnivDatos Market Insights (UMI) is a passionate market research firm and a subsidiary of Universal Data Solutions. We believe in delivering insights through Market Intelligence Reports, Customized Business Research, and Primary Research. Our research studies are spread across topics across the world, we cover markets in over 100 countries using smart research techniques and agile methodologies. We offer in-depth studies, detailed analysis, and customized reports that help shape winning business strategies for our clients.
Over the past few years, the restaurant experience has changed in many ways, galvanized by the pandemic. With the rise in on-demand delivery, consumers have gotten used to quick service and easy-to-use technology, available right on their mobile devices, even in fine-dining restaurants. A prominent example of this trend in the U.S. – where handheld mobile point of sale (POS) adoption has tended to lag Canada and Europe – has been the heightened use of QR codes. By scanning QR codes on their smart phones, Americans can not only seamlessly access menus to order but also pay their bill in seconds
As QR codes have become more popular, it’s left some restaurants that don’t offer this technology behind, especially as diners have gotten used to the ease of ordering with a code and their phone. Therefore, to meet steadily rising consumer demand for a streamlined dining experience, it’s important for restaurants, bars, and other food service locations, to consider integrating QR code payments and technology into their businesses, with the goal of increasing both customer and employee satisfaction.
Deliver Faster & Better Customer Experiences
Consumers are constantly on the lookout for ways in which they can minimize the time they spend doing anything they consider burdensome, whether it’s grocery shopping or running errands. And the same psychological motivation also drives consumers when they dine in a restaurant. Through quick service, customers can get their food, enjoy their meal, and move on satisfied to the next thing they have to do that day.
One of the simplest ways to expedite the restaurant experience, without sacrificing the quality of service, is through order and pay-at-table options like QR codes. With QR codes on the table, customers are able to access the establishment’s menu, order, and then pay for food and drinks as they want. Depending on the payment technology the restaurant uses, they can also start an online tab and pay the bill at the end.
Through this technology, customers can complete their transaction without having to wait for a server to collect the check and sign a bill. Mobile payment options accessed by scanning a QR code also provide different pre-set tip amounts, along with an option to specify the tip amount yourself. This sort of tipping functionality reduces the hassle and wasted time associated with calculating the right tip amount. If the restaurant is part of a chain, or has a large enough following, QR codes can also be used as an effective channel for customers to build loyalty points, strengthening the establishment’s customer retention.
Cut Costs & Improve Employee Gratification
While there are several reasons to employ QR codes at a restaurant for customers’ benefit, they can also help to cut overall costs and improve the morale of employees such as waiting staff. With QR codes for menus and payments, there is a need for restaurants to maintain physical menus and the extensive receipt paper associated with traditional point of sale (POS) terminals. This helps reduce expenses and the restaurant’s bottom line overall.
Another important consideration for a restaurant looking to implement QR codes and mobile technologies is the positive impact on employees. It’s no secret that many restaurants and food service establishments have struggled with staff shortages over the past few years. From ordering to settling bills, QR codes and mobile payments allow restaurant owners to streamline the workloads of their waiting staff. By having other methods and tools that make their job functions simpler and easier, servers and other staff might be more satisfied and could be more likely to stay on-staff for longer.
The streamlined customer experience associated with mobile POS systems ensures that diners are also more likely to leave larger tips. After all, there is far less friction around paying and tipping itself, when a customer only needs to click a button as opposed to doing the math to leave an appropriate amount of tip.
Broader Mobile Payments Adoption
At a time when small businesses like restaurants face significant pressure to acquire and retain customers, it’s important that restaurants can create better overall dining experiences, alleviate difficulties for their staff, cut costs, and set themselves with loyal customers for life. Mobile payments and QR codes help enable this opportunity.
More broadly, the growth of QR code payments in U.S. restaurants could serve to stimulate handheld mobile POS adoption by establishments eager to meet their clientele’s changing expectations. Could pay-at-table soon become the norm for American diners, as it already is in Canada and Europe?
As the restaurant industry battles inflation, the large size of chains and their access to cash gives them the upper hand, but independents have advantages of their own when managing higher costs.
Feeling the pressure on their budgets, consumers have been cutting back on their restaurant visits in recent months. Monthly same-store restaurant traffic has been shrinking compared with the year-earlier period for eight consecutive months, according to industry tracker Black Box Intelligence. In response to that drop-off, both chains and independents are working to address the cost factor without alienating diners.
Prices for food consumed away from home have risen 8.6% over the last 12 months, as of October, according to the Bureau of Labor Statistics, as restaurants raise menu prices to address the soaring costs for ingredients, labor and even energy.
Aaron Allen, founder and CEO of restaurant consultancy Aaron Allen & Associates, compared restaurant chains to oil tankers and independents to speedboats. Chains have bigger budgets, broader scale and other tools like advanced technology. But they’re also often slow to act and mired in bureaucracy.
A mom and pop restaurant, on the other hand, doesn’t have the same access to cash or the benefits of size but can move more quickly to make changes.
Scale matters
When it comes to inflation, restaurant giants like McDonald’s and Starbucks have some obvious advantages over independent burger joints and coffee shops. Their massive size helps chains lock in prices early when buying ingredients from suppliers, and they can often apply pressure to receive more favorable contracts.
“If you’re a chain, you’ve got the power of bargaining strength and leverage with suppliers, which is what’s happening,” Allen said. “Independents don’t have a lot of wiggle room to switch suppliers, except for non-core things.”
Of the more than 843,000 restaurants, food trucks and ghost kitchens in the United States, roughly 37% are part of chains with more than nine locations, according to food analytics firm Datassential.
Noodles & Company, which has more than 450 locations, recently signed a deal for its 2023 chicken supply. The company expects the contract will help it save about 2% relative to its third-quarter margin for cost of goods sold.
“As you look through all of the disruption in the supply chain environment, vendors want some level of certainty in terms of purchase quantities, not just price,” Noodles CEO Dave Boennighausen said.
Because chains are placing larger orders, suppliers typically prioritize their orders over those for independent restaurants. Adam Rosenblum, chef and owner of Causwells and Red Window in San Francisco, said uncertainty securing ingredients has caused him to buy two or three times what he normally would when they’re available. And carrying that higher inventory puts more pressure on his razor-thin profit margins.
“I don’t have the buying power, I don’t get to set my prices annually, and I’m just not going through enough product to matter to some of the bigger companies,” Rosenblum said.
In the United Kingdom and other European markets, which have seen even higher inflation than in the U.S., large franchisors have said that they’re providing financial assistance to operators who are struggling to cope with higher costs. For example, McDonald’s executives said in late October that the fast-food giant may offer “targeted and temporary support” to European franchisees who need it.
Independent operators don’t have the same luxury. Kate Bruce, owner of The Buttery Bar in Brooklyn, said she’s been facing higher costs for everything from labor to cooking oil to energy.
“It’s expensive to run a restaurant these days, and ours is small. So these costs matter, and everything is very tight,” she said.
Nimbler and more flexible
On the other hand, independent restaurants have the advantage of speed. If a mom and pop notices much higher prices for a key ingredient in an entree, the restaurant can quickly change prices, slim down the portion size or even remove the item from the menu.
For example, Bruce said that if she raises the price on one item, she likes to add something else to the menu that’s cheaper.
“Yes, we have Wagyu beef, but [we] also have some salads that are a little more affordable and chicken entrees that aren’t going to scare somebody away from coming in,” she said.
Portillo’s restaurant chain CEO Michael Osanloo said independents do have greater flexibility when it comes to changing prices. Fast-food customers expect the same prices at every location, but menu prices can vary based on where the location is and if a franchisee or the company owns that restaurant. “There’s a little bit of price shock,” Osanloo said.
Consumers care more about prices when they’re visiting a chain restaurant, according to findings from a survey of roughly 2,400 U.S. consumers conducted by PYMNTS. More than a third of respondents said everyday prices mattered when picking a chain restaurant, while just 22.5% said it factored into their decision making when selecting an independent eatery.
And while beloved chains have brand recognition and the pricing power that comes from that, independents also earn goodwill from some consumers by virtue of being a small business.
“There’s this perception of authenticity, like a family Italian restaurant versus a big chain like Olive Garden,” Allen said. “That sentiment has started to hurt chains.”
By any concrete rubric, restaurants in New York City are the same as they’ve always been. All the pieces are intact – there are new, exciting restaurants; there are old, exciting restaurants. According to New York Magazine, this fall is “the busiest opening season in years”.
Since the city’s vaccine mandate was lifted back in February after nearly two years of no indoor dining and limited capacity, there are have been no formal rules at all. Things are normal. Better than normal. “Every single month is our strongest month ever,” Resy CEO, Alexander Lee, told the Atlantic; it had been true for all of 2022, he said, and he saw no signs demand for reservations would be slowing down.
It is incredible, I keep reminding myself, to talk and laugh inside a room of talking, laughing strangers, eating food I did not – probably could not – cook. So then why doesn’t it feel the same? There doesn’t seem to be any single thing that’s wrong, so much as the overarching sense that it used to be better and more fun. Didn’t it?
It’s largely a confluence of two factors – inflation and the ongoing labor shortage, two unsexy forces that are being felt in all kinds of industries. But in restaurants, they are so distinctly visible: prices are high, service is strapped. It is all almost normal. Fine. Good, even. It could go on like this forever! For diners, the experience feels – not bad, so much as limp. For chefs and servers, there is a sense of suspended animation. “We just don’t know where we’re at,” says Leah Cohen, a chef with two Manhattan restaurants – Pig & Khao, on the Lower East Side, and the newer Piggyback in Midtown. “We’re in this weird limbo phase.”
In 2020, when the world shut down, restaurants became a beacon and a cause. Suddenly, everybody was talking about the service industry, about the undocumented workers who make up as much as 40% of the city’s kitchens. All at once, everyone seemed to understand the precarity of the industry, but also the transcendence of it: people love restaurants. They missed restaurants. They missed restaurants so much they made restaurants for chipmunks. There was a giddy magic in the first days of reopening, when diners were tipping wildly, and the people venturing out were just elated to be back.
“Customers went from being pains in the asses to being like, ‘We love you guys! You’re essential workers!’” laughs Cohen. “That was very short-lived.”
While Cohen’s staff are dealing with the return of demanding diners, Cohen, as an owner, is feeling the impact of inflation first-hand across the board: ingredients are more expensive, labor is more expensive, equipment is more expensive, and as a result, dinner out is more expensive.
Cohen reports that while once she charged “maybe $36” for the half-duck, the current price is $42. Recently, the New York Times broke down the increase in costs for a restaurant in North Carolina, and their reasons: Canola oil, up 159% (the war in Ukraine); a new hot water heater, up 25% (the cost of stainless steel). Diners feel the trickle-down effect.
“That’s the price we have to charge, because that’s how much stuff costs now,” Cohen says, and even knowing that as well as anyone, she understands: it’s a lot. “When I go out to eat, and I see the bill, it’s not a shock to me, but it’s something I have to process,” she says.
Paying more would hurt less if the dining experience was uniformly stellar. I would like that to be the case – everyone would like that to be the case! – but that is not the current world. “We have not come back in a form that looks anything like what we were before Covid,” one veteran server at an high-end Italian restaurant in Manhattan told me. (Like many of the restaurant workers interviewed for this story, he asked to remain anonymous to avoid potential repercussions.) “And I think the biggest reason for that is because it’s impossible to hire staff.”
The industry-wide labor shortage is old news: in January, the Bureau of Labor Statistics noted the restaurant industry’s year-over-year quit rate was more than any other job sector, even as the hiring rate remained the same. As of September, jobs in New York City food service were still at 87% of pre-pandemic levels. Many restaurants have increased wages and reworked benefits in an attempt to attract staff, but while the improvements are long overdue, alone, they haven’t been enough.
“I mean, we hire anyone, if you’re good or bad,” says Cohen. “We just don’t have the ability not to. At some point you hire for bodies and pray and hope that some of them are good.”
In dining rooms across the city, the shift is palpable. “We had to start over from near-scratch,” says Rashaad Jones, a former captain at Eleven Madison Park, one of the city’s fanciest restaurants. “We were always hiring and always had new people coming in,” he says, “but if you have 90 people that are seasoned veterans of the restaurant training one person who’s brand new, that’s a seamless transition, versus five seasoned veterans training 150 people.”
Jones left the restaurant this summer. “It was no longer good for my body or my mental health,” he says. He’s remained in the industry, consulting on a new restaurant, and working part-time in wine.
People whose experience might have got them a back waiter job before – an entry-level position clearing and setting tables – are skipping straight to front waiter posts, the server at the high-end Italian restaurant explains; one new colleague, who’d been hired as a captain – the absolute top of the front-of-house pyramid (“that’s where the buck stops if there’s a problem”) – had only ever answered phones.
The result is that everyone is scrambling to get the new generation up to speed. “It’s very stressful,” a longtime server at a popular Brooklyn pizza spot told me. “You’re already stretched thin because you’re understaffed, so people really aren’t getting the support and the training that they need,” she says. And at the same time, “you have a lot of the veterans burning out.” Meanwhile, the kitchen line is also new, understaffed and still in training, and food is often slow, and there isn’t necessarily anyone with the institutional memory to know what a dish is meant to look like.
“It really does change the way the restaurant works,” says Sophie, 30, a longtime server at a casual fine-dining restaurant in Lower Manhattan, who estimates that about a third of people working front of house are new since the pandemic. (To speak freely, she asked to be identified by her first name only.) “It changes the culture.” It is perhaps less united that it used to be, divided by default into an old guard and a new guard, “which is kind of the opposite of what I would want in a restaurant culture, which would be solidarity and inclusivity”, she says. Jones, a classical cellist by training, likens restaurants to orchestras. “There’s all these components, but there’s a collective as well,” he says. “That whole machine is what is able to accomplish things. No one part is more important.” Or as Sophie, whose restaurant pools tips, puts it, less romantically: “We’re all making each other’s money.
“People who didn’t work at the restaurant prior to the pandemic are more real about the job,” Sophie says. “This is a restaurant job, just like my other restaurant jobs.’ Whereas a lot of folks who were there before the pandemic, myself included, are like, this is different. This is the most special restaurant job you’ll ever have.”
“I think it’s this moment. I think it’s New York,” says the pizza server, who has been struggling to motivate new colleagues. People are “just in survival mode right now”, she says. “Nobody really feels excited in their current moment or place.” I deeply understand; I am struggling to think of anyone I know, in any industry, who is deeply excited about their current time and place.
Not having the same pre-pandemic solidarity behind the scenes “makes work less fun and more stressful”, Sophie agrees. “And that’s tough, because there are so many other factors that make work less fun and more stressful.”
It is not a secret that people are on edge. “Everyone is acting so weird!” the Atlantic observed this past spring, citing what seemed to be a general uptick in deranged public behavior. In October, NPR talked to researchers at Florida State University College of Medicine who’d found evidence that years two and three of the pandemic have left Americans with “significant declines in the traits that help us navigate social situations, trust others, think creatively and act responsibly”.
“I feel like anxiety is at a real high,” says Sophie. “And it’s resulting in people being wild, getting fucked up, getting aggressive,” and while it’s everywhere, “it feels heightened in the restaurant space”. What is a restaurant if not a distillation of the vibe? The other night, she says, a guest, apparently appalled at the service he’d received, had to be held back by his friend in a manner she describes as “joking, but not really”. There have always been unhappy diners, difficult people, off nights. “But that kind of extreme emotional response to bad service in a restaurant is new.”
“There is an existential malaise that’s sort of blanketed everybody,” one Brooklyn expediter told me. “You just don’t know what the future holds. You don’t know what’s solid any more. You don’t know what you can hang your hat on. So why put in the effort if there’s no guarantee that it’s going to be there tomorrow?” He was talking about restaurant workers, but he could have been talking about diners, too. It is restaurants, but it is also everywhere: everything that felt permanent isn’t, and yet the world continues to go on, and nobody is exactly sure what happens now.
There are reasons to be hopeful. The longtime server at the high-end Italian restaurant, a 50-year veteran of the industry, is optimistic about the future. Even the staff turnover, he argues, has an upside. “There’s just an eagerness and an energy that people who are doing something that’s really new to them have. It brings a little more excitement than there might have been with more seasoned staff who’ve seen it and done it all.”
In just the last few weeks, Jones says, for the first time since 2020, he’s been able to go out and forget the last few years. “I think there’s been a marked change in how people are feeling in dining rooms,” he says. “It’s feeling better and better.” But it isn’t quite the same; of course, Sophie points out. It can’t be.
“The pandemic kind of pulled back the veil of the service industry,” says Sophie. “And now it’s hard, from both ends, to pull the veil back.”
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From private “clubstaurants” to NFT reservation tokens to concierge services, getting a table is a lot easier if you’ve got the money.
As long as there have been high-status, celebrity-studded restaurants, there have been people clamoring to get into them, working contacts, making phone calls, greasing palms. Lately, though, it can seem like every restaurant in New York is that kind of restaurant.
In the pandemic era — with hours cut back in many cases, and a public eager to eat out once again — the competition for tables has reached a frenzied pitch on electronic reservation platforms.
“Without over-embellishing, within five seconds basically all reservations are taken,” said Steve Saed, who started #FreeRezy, a free electronic forum where people could swap reservations among themselves. “It’s like winning the lottery to eat at these places,” he added.
But a new generation of tactics have emerged to help would-be diners jump the line, including latter-day concierge services, NFTs granting holders special privileges, members-only credit card perks and private “clubstaurants.” What they all have in common is that they will cost you.
“However many years ago, it was slip the host or hostess $20 and bypass the line,” said Alex Lee, the chief executive of Resy and vice president of American Express Dining. He runs the companies’ Global Dining Network, a program that offers a select group of Amex members (Amex owns Resy) access to certain restaurant perks through the reservation platform.
The program, he suggested, is just the natural evolution of that furtive $20. For an annual credit card fee in the hundreds or sometimes thousands, Global Dining Access members can obtain priority reservations at hot restaurants across the United States. “The first thing customers want is access, right?” Mr. Lee said.
But at certain members-only restaurants, a reservation alone is not enough.
Haiku, a private Japanese restaurant in Miami, makes a slightly different calculation. The restaurant accepts members by invitation only, for an annual fee, and asks them to commit to at least four reservations annually for a 10-to-12-course kaiseki-inspired omakase menu. The restaurant declined to discuss either the application process or the price.
Jeff Zalaznick, a partner at Major Food Group, was only slightly more forthcoming about plans for the New York debut of ZZ’s Club, which will feature a members-only Carbone. Like the first ZZ’s in Miami, which offers members access to a Japanese restaurant, a sushi bar, a bar and lounge and a cigar terrace, ZZ’s Club New York will bring the Major Food Group experience to the financial and social elite. (Like Haiku, Major Food Group would not disclose the fee or the application process.)
But given that the original Carbone — which recently lost its Michelin star — is already impossible to get into, is it really necessary to have an even more exclusive version just two miles away?
“One of the great things about being a private member’s club, is the fact that you really can tailor everything on the food and beverage side to your customers at an even higher level than you can, obviously, when you’re just a public restaurant,” Mr. Zalaznick said.
This means knowing what members want, and how exactly they want it: How do they take their steak? Do they prefer still or sparkling water? What is their standing order, and with which modifications?
Diners can have all those things at the London import Casa Cruz, on Manhattan’s Upper East Side, but for a stratospheric price tag. The top-floor dining room there is reserved for the 99 members of the restaurant’s “investor group of partners” who have paid between $250,000 and $500,000 to join.
“I think there’s a demand for curation,” said Noah Tepperberg, the co-CEO of Tao Group Hospitality, which next year is opening a private club in the River North neighborhood of Chicago, in collaboration with the restaurant group Lettuce Entertain You.
In the grand tradition of private clubs — from New York City’s Union Club to San Francisco’s Bohemian Club to the recently rebranded ’Quin House in Boston — these exclusive clubstaurants require not only cash but status.
At Lilia, the Brooklyn Italian restaurant from the chef Missy Robbins, reservations are routinely booked solid a month in advance.Credit…Vincent Tullo for The New York Times
“Restaurants began as places to show off status,” said Andrew P. Haley, an associate professor of history at the University of Southern Mississippi. Generally, this took place in public, where discerning diners could be seen demonstrating their discernment.
The members-only clubstaurant, on the other hand, confers another kind of status, suggested Megan J. Elias, the director of the gastronomy program at Boston University: “You can be a connoisseur among a very small number of connoisseurs.”
Mr. Saed said he’s not surprised that access is being monetized.
“Part of it tracks to the types of people that are renting in New York now,” he said. “With rents pushing over $4,000 to $5,000, I think that the proportion of people that are living here that have the discretionary income to spend are kind of more here.”
Still other restaurants — the public kind — are leaning into patronage-style programs, aiming to give certain customers premier access, while remaining open to the rest of us.
Under normal circumstances, it can take weeks or months to get into Dame, the West Village fish-and-chips sensation. But there is a workaround: Front of House, a platform designed to help restaurants sell “digital collectibles,” also known as NFTs, that grant holders special access.
Instead of lining up at 4:30 p.m. on a Monday, the one day Dame takes walk-in diners, a devoted diner could pay $1,000, which buys them the ability, with at least 24 hours notice, to book a table once a week through the end of 2022. (20 such tokens have been created; 11 have been sold so far.)
Stephanie Dumanian, a cosmetic dentist in Manhattan and a fan of the restaurant, was trying without success to make a reservation for her husband’s birthday when she found Front of House. She bought a token in July, and has been three times since. “It’s been great,” she said. “I feel like I’m supporting a local business.”
Colin Camac, a co-founder of Front of House, said the platform is simply expediting intimacy.
“I think one of the best things in the world is going into a place just like Cheers, where everybody knows your name, where they know what you like, where your martini is sitting there as soon as you walk in,” said Mr. Camac, who is also a regional director at Resy. “It’s an easier way to be part of that community if you don’t have the time to really invest in it.” In other words, anyone can be a regular, for a price.
“It’s kind of a trade secret in the concierge space that you have to build relationships, and spend a lot of time doing it, in order to deliver these very hard to get reservations,” said Peter Adams, the founder of Table Concierge.
His start-up is for people with money but not time, and a would-be diner doesn’t actually have to be a regular to get treated like one. “You could do this on your own,” he said, but he streamlines the process “so you don’t have to wake up at 8 a.m. or book at midnight.”
For a price — usually $50 per reservation per person, but it depends on the difficulty — Mr. Adams works his connections to open doors that appear closed to the rest of us. (White glove service means he will go as far as going to a restaurant in person to negotiate on a client’s behalf.)
With a week or so warning, he puts his success rate at 90 percent. You want Lilia? He’ll get you Lilia, nevermind what Resy says. “We can get you in anywhere other than Rao’s,” he said of the exclusive Italian restaurant in East Harlem.
Though he added: “But if you want to give me $10,000, I can find a way to get you into Rao’s.”
New flavor trends are emerging at the intersection of persistent food inflation and pent-up consumer demand leftover from COVID lockdowns.
According to industry experts, consumers are looking for authenticity and transparency above all else, and those values are largely dictating which flavors will win out next year.
With that, here are three of the top flavor trends experts say to watch in 2023:
1. Complex Heat
Spicy food has been gaining popularity over the last decade, but today’s consumers crave more than just heat—they want to learn about different peppers and the complexity of their flavors.
According to Spoonshot’s 2023 Trends Report, interest in complex heat “goes beyond level of heat to specific varieties of pepper from around the world, underlying flavor notes, and even pairing with other flavors.”
Spoonshot’s data shows that the complex heat trend is being driven by consumers’ growing interest in international flavors, which some experts attribute to a collective desire for new experiences in the wake of COVID lockdowns.
“What we’re learning is that this is partly about making us feel something,” Robyn Carter, founder and CEO of Jump Rope Innovation told The Food Institute. “Breaking up the monotony, amusing and stimulating ourselves.
“There are also cuisines that are trending, as consumers seek new experiences through food, where spice levels are more complex and at higher levels than U.S. consumers are generally used to—Indian, West African, etc.” Carter explained. “As those cuisines continue to go mainstream in 2023, we’ll see more complex heat ahead.”
2. Nostalgia
Coming out of the COVID pandemic, many consumers are drawn to comfort foods that remind them of simpler, pre-pandemic times. Nostalgic foods have become hugely popular over the last year, and the trend doesn’t show signs of slowing in 2023.
“In times of change and uncertainty, human nature takes us back to the things that make us feel safe and comfortable,” Dan Mesches, CEO of Sprinkles Cupcakes told The Food Institute. “Food especially has the power to do this.
“So when you start seeing certain flavors you remember having growing up or dishes that remind you of cooking at home with your family, there’s an instant connection there,” Mesches said.
Kellogg’s banked on this kind of instant connection when it brought back Frosted Grape Pop-Tarts earlier this year, a flavor that was discontinued in the 90s, when millennials were growing up.
McDonald’s also tapped into the nostalgia trend this year when it released an adult Happy Meal, complete with a plastic toy, as part of a limited-time collaboration with streetwear company Cactus Plant Flea Market. The fast-food giant is doubling down on nostalgia this Halloween by bringing back the Boo Bucket, a Happy Meal served in a familiar trick-or-treating pail, which debuted in 1986.
3. Street Food
Consumers are looking for new experiences through food while navigating a steady increase in food inflation at the same time—street food reconciles both of these truths, making it a cuisine of the moment.
“Street food carries an aura of authenticity that people right now, especially Gen Z, seek out,” Leith Steel, senior strategist and Head of Insights at Carbonate told The Food Institute. “By nature, it is accessible and carries a lack of pretense, it can also be seen as an antidote to fine dining.”
Elote, Mexican street corn, is one example of an authentic street food that reached mainstream appeal in the U.S. over the last few years. PepsiCo released Mexican Street Corn Cheetos as a limited-time offer in 2021, and Kellogg’s came out with Pringles Mexican Street Corn Crisps this summer.
According to Spoonshot’s report, chaat masala, a spice blend from North India and a staple ingredient in many street food dishes, could be the next big thing in 2023. Right now, consumer interest in chaat masala is five times greater than business interest, indicating that there is demand waiting to be fulfilled.
The alcoholic drinks industry has had to deal with a “relentless series” of major macroeconomic challenges, creating “a perfect storm” for brand owners, according to analysts at GlobalData.
Speaking at an event on the outlook for the industry, GlobalData analysts highlighted a number of “major disruptions” to the alcoholic beverages value chain, including supply-side shortages of crucial ingredients and packaging materials such CO2 and aluminum, lower yields of raw materials including hops brought on by summer droughts and skyrocketing energy costs.
GlobalData beer and cider research director Kevin Baker said because of these increases price hikes have been unavoidable for alcoholic beverage manufacturers. He warned, however, that continued pressure on consumers’ personal finances from inflation would feed into demand in the future.
“The alcoholic drinks industry has witnessed major disruptions across the entire value chain due to raw-material shortages, rising operational costs and distribution challenges,” he said. “Companies have been left with little choice but to raise prices to protect their profit margins, and therefore pass these costs onto their consumers.”
Baker added: “However, consumers have elevated levels of concern over their personal finances, which will most likely lead to a change in purchasing habits either immediately or at some point in the future.”
Citing GlobalData’s Q2 consumer survey, Baker said 84% of global consumers were concerned about the impact of inflation and their personal finances, and would likely face “tough shopping choices ahead”, with non-essential food and beverage items most at risk.
“Ultimately, the consumer will be faced with tough decisions ahead, either to spend less through trading down, buying less or switching out of the category altogether,” he said.
Baker added the onus was on beverage brand owners to mitigate concerns over the rising cost of living by “reviewing their portfolio range, from packed down, sizing and multi-pack formats to price promotions and discounting strategies” in order to ensure sales remained resilient.
Despite this, demand for alcoholic beverages has continued to rise, with GlobalData predicting volume and value growth of 4% and 12% respectively by the end of 2022, as pent-up demand following two-years of pandemic disruption outweighs the impact of inflation on consumer disposable income.
GlobalData alcoholic beverages manager David Harris said alcoholic beverages categories remained “resistant to inflationary concerns”, highlighting their credentials as “recession-proof”.
“Consumers continue to spend more on alcoholic beverages each year,” he said. “In 2016, the average consumer was estimated to spend US$230 on alcoholic beverages every year. Now, however, the average per capita spend adjusted for inflation has increased to US$245 per year.”
“Despite inflationary and geopolitical concerns, performance is forecast to pick up in the coming years, with pent-up demand being a key driver following the Covid-19 pandemic, and this will drive growth across all price segments, through to 2026.”
