The last major revolution in the restaurant industry was The Great Recession of 2007-2009. Food trucks proliferated, fine dining chefs shed their crisp white coats and began crafting sophisticated, casual fare, deli sandwiches and diners scrutinizing his food. Fast casual was booming, but demand for Highfalutin’s multi-course his fixer outstripped supply.
Some of the culinary changes, often referred to as the “casualization” of the industry, brought about by these difficult times continue today, but it’s clear that the pandemic has pushed things further.
Regardless of whether the economy heads into recession next year, diners are cautious and very price sensitive. Restaurant transactions fell by about 7% in the third quarter of this year, according to Rabobank research. This is a slightly worse decline than the second quarter, which experts attribute to menu price inflation and consumer pressure.
“We’ve been steadily lowering our forecasts every time we look at the industry, especially actual volume growth,” Henkes said. Top-line numbers look pretty good, he said, as restaurants have raised prices.
Consumers feel constrained, but restaurateurs are even more distressed: Government data shows that the price of food consumed at home has risen 12% in the past 12 months, and that more people are staying away from home. At the same time, food consumed in the United States rose by 8.5%. This means that restaurant owners are eating some of that food cost increase and are not passing it on to their customers in order to remain competitive.
One way restaurants are dealing with uncertainty is by scaling back their offerings and streamlining their menus. Focus on foods that have a longer shelf life, higher profit margins, and less effort to prepare. (Restaurant labor costs are up 9.8% this year, and last year he was up 9%. According to the National Restaurant Association.) Menus have become an exercise in brevity during the pandemic and are no longer haiku, but they remain simplified.
Chefs and owners need to reduce their entrees from 10 to, say, 6 and cover the most popular categories such as chicken, beef, salmon, shrimp, and vegetarian, so the range is narrower and more creative. Cooking is getting shorter.
Adding to the culling of choices, says Smith, is the shrinking nest egg of small, independent restaurateurs during the pandemic. not. He anticipates struggles and possible closures of several small international and local cuisine-focused restaurants.
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