Operations
5 ways to solve restaurant industry's top 3 challenges
Several tools can help us solve labor shortages, supply chain disruptions and rising operating costs.
March 22, 2022
While we can't see what the future holds, the worst of the pandemic seems to be passing, and the outlook for restaurants is looking brighter than ever. Of course, there are a number of challenges we have to work through, but we're excited to see the innovation ahead as restaurants shift from survival mode back to evolving to meet consumer preferences and thoughtfully navigate the challenges ahead.
The challenges seem clear:
- Labor issues are driving up prime costs. Nearly one-quarter of the 4.5 million Americans who left their jobs in the last year were in hospitality. Now restaurants are having to work to attract, train and retain a new talent pool, all while staying competitive with salaries and benefits.
- Inflation is driving up costs for restaurants and their guests. While slow, regular inflation has always led to cost increases over time, the rapid rate of current inflation is leading many restaurants to adjust pricing to cover costs. This could lead to some people eating out less often or ordering less when they do.
- Supply chain disruptions are making some ingredients hard to find and leading restaurants to take certain items off the menu, whether that's just for a few days or hours, or for a few months until the supply chain normalizes again.
So, what are the trends we should expect to see in the coming months as restaurants continue their resurgence?
- Ghost kitchens aren't going anywhere. Ghost kitchens helped restaurant brands better meet the demand for pick up and delivery, growing to a $43 million industry. While that is a drop in the bucket now, it's expected to rise to more than $70 billion in just five years. We will see a spike in the popularity of ghost kitchens, even among full-service brands that would never have previously considered making off prem dining part of their business.
- Integrated tech will help operators understand their business and gain competitive advantage. The last five to 10 years have given us the rise of restaurant tech with operators adding new point of sale vendors, inventory, customer experience, scheduling, online ordering and more. However, it's become clear that with new technology came additional complications when it wasn't working together correctly. Inventory couldn't give a full picture without pulling from POS data, or reporting would be skewed when each system counted metrics in a unique way. Restaurateurs have now begun to focus on finding technologies that work together effectively in order to gain more visibility and efficiencies.
- Redesigning physical space to better serve evolving customer preferences. As off premise grows, it's not just ghost kitchens that will serve that need. Some operators are choosing to maximize their back-of-house space and create distinct "pick up" areas for delivery services and to-go orders. Additionally, drive thru is more popular than ever, and companies are expanding or adding drive-thrus to meet customer demand.
- AI and automation are finding ways to add points of profitability. Certainly robots, both in the kitchen and for delivery, are making great strides and already seeing wider adoption in certain concepts and cities. But automation in technology is also driving growth by streamlining operations. When you have technology that can fully or partially automate previously manual processes, you can put that profit right back in your pocket. Things like schedule creation, reporting, CX surveys, purchasing, tracking inventory and more are all part of the automation revolution that we will see in 2022.
- Pay and benefits are rising to meet demand. In a more competitive labor market, operators are fighting higher costs in multiple ways. Not only are they using those automated tools to make the most efficient use of the labor they do have, but they are also boosting wages and benefits to attract and retain talent in a tough market. By combining tactics, restaurateurs can offset the increase in labor costs with more efficient labor and schedule management.
No time in the restaurant industry will ever be perfectly smooth sailing, but it seems like bluer skies are ahead for restaurant operators. Despite challenges with labor, supply chain and inflation, we now have the tools to address these problems. These trends are indicative of the evolution of the industry up to now, as well as responses to our current challenges.
Included In This Story
SynergySuite
SynergySuite helps multi-unit restaurants simplify operations and increase profitability with easy-to-use restaurant management software. Global brands trust SynergySuite's mobile-first software with inventory, purchasing, recipe costing, food safety, scheduling, cash management, human resources and business intelligence.
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