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The New Normal in Restaurants

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If you've been out to eat recently, you may have noticed a difference in the post-pandemic restaurant scene. Smaller menus, higher prices, longer waits, and sometimes a change in food quality await many diners.

Restaurant closures

Crain's Chicago Business reported that over 300 restaurants in Chicago have shuttered since the 4th quarter of 2021. Those that remain open face struggles daily, including staffing, supply chain shortages, and inflation.

Despite this, the National Restaurant Association projects the foodservice industry will reach $898 billion in sales this year, surpassing pre-pandemic sales levels from 2019. Don't let that number fool you. Much of the increase comes from price increases alone. Adjusted for inflation, sales in 2022 are likely to remain below pre-pandemic levels. However, many remain cautiously optimistic that the industry will bounce back and thrive.

The pandemic took a toll on the industry and its employees. Now, the increased cost of labor and fuel and shortages of everything from napkins and takeout containers to produce and meat will impact the industry for some time to come. Basic economics of supply and demand tells us that when demand outweighs supply, the price increases. According to the National Restaurant Association, wholesale food prices rose 7.9%, while hourly wages in the industry rose 8.6% in 2021.

New restaurants

While many restaurants shuttered in the pandemic, others have opened. There's no shortage of people looking to get out and enjoy a meal with friends after lockdown. Take the Graceful Ordinary, a high-end restaurant that recently opened in St. Charles. Their social media had mouths watering for months before they opened for business. Now that they are open, there is a six-week wait for weekend reservations.

Some chefs started their food businesses during Covid as a food truck, catering business, or on social media as a takeout service. Many of these food entrepreneurs built a solid following and socked away enough cash to open brick-and-mortar restaurants.

Fernando's Street Kitchen in Batavia was a small catering/food truck business pre-covid. Fernando's was a main attraction at the Batavia farmer's market during the summer of 2020 and often had a line of hungry people waiting to place orders. By 2021 his weekend catering business was in high demand, and he was too busy for the market. During the week, his food business included family-style taco packs for pick-up and generally sold out.

Fernando currently has a robust catering business that includes two food trucks that travel to weekend events. He's fully booked through the summer (it's still March!) His new permanent space in downtown Batavia is currently open for lunch and dinner, but he admits to walking a fine line to determine when to hire more staff and increase his hours. He's paying close attention to when he is busy and what people are ordering.

Restaurant pivots

Restauranteurs in business pre-pandemic had to be creative to keep revenue steady while we were in lockdown: many offered alcohol-to-go or reasonably priced family-style meals, and those who could afford the price tag invested in heated outdoor dining. Even though the lockdown is over, many restaurants have kept their covid modifications, which are profitable and continue to add to the bottom line.

Key performance indicators (KPIs) are essential for any entrepreneur, and in our current economic environment, they are necessary for a food entrepreneur. Point of sale systems contain all the details needed to determine how to streamline a menu. Using this information, a restauranteur can create an efficient menu that will prevent food waste and allow the restaurant to remain profitable.

This "new normal" may be with us for the foreseeable future. As a restaurant patron, remember that the staff appreciates patience while in flux. 

Holiday Food Traditions
Learning to Cook Through Time
The Business of Food, LLC
1330 E. State Street, Unit A
Sycamore, IL 60178
815.991.5505