State of the Restaurant Industry: 2022
Updated: Oct 12, 2022
The National Restaurant Association's 2022 State of the Restaurant Industry report highlights the latest data and developing trends of the foodservice industry. We've created a brief summary of their findings and additional insights from Foodi Menus.
The state of the hospitality industry
Foodservice operators are facing several challenges going into the third year of the pandemic. The costs of food and labor are increasing, restaurants have been impacted by the great resignation more than any other industry, and in many places local governments are still dictating how many people can be served indoors. On top of these barriers, online ordering is growing 300% faster than in-house dining while mobile delivery services continue taking 30% of every order.
Young adults view takeout and delivery as their go-to food, with 72% of millennials and 66% of Gen Z calling it “essential” to their lifestyle. The vast majority (85% of Gen Z) use 3rd-party delivery, even though they indicate a slight preference for ordering directly from a restaurant.
Why are restaurants so optimistic?
As an industry, the hospitality space has ignored the technology piece of their business (or been ignored by good technology, depending on your perspective) for as long as they could. There’s been much change in the foodservice tech space over the last 18 months, and the next 18 are expected to be ever crazier as the industry changes once things start opening up. As it stands today, 51% of adults say they aren’t eating at restaurants as often as they would like, while more than half of restaurant operators said it will be a year or more before business conditions return to normal. The reliance on technology in the hospitality space is only going to accelerate from here. Now is the time to invest in a massive industry world-wide that needs a ton of help - and is finally willing to accept it.
The appetite for change during the pandemic was the biggest determinant between those who left early, those who have struggled the most, and those who have made the best of the situation. What this means now is that a much larger portion of the foodservice space is open minded about using technology to improve their business. The current hiring shortage is going to remain - because those who left the hospitality industry aren’t coming back. But that's okay. With QR codes, touch screens, and other Smart-Menus gaining traction, people will be able to place orders themselves leading to a faster ordering experience. Technology is going to be required to take on the burden, and that will free up time for more professionalism, benefits, wages, and stories.
What do Millennial and Gen Z Customers Want in a Restaurant?
Foodservice operators aren’t the only ones ready for change; Millennials and Gen Z prefer
Eight out of 10 millennials and Gen Z adults say they would be likely to use a tablet for ordering at the table, if offered by a restaurant they patronize. Given a choice between sitting in a restaurant section offering traditional wait service or a section with tablet/smartphone ordering, slightly more than half of Gen Z customers opt for high-tech ordering. This could signal the need for fewer servers as Gen Z becomes a larger consumer segment.
What Issues Should Restaurants Prepare for in 2022?
With less need for servers, the reliance on good menu display for self-service is going to be the biggest issue facing small hospitality businesses within the next 2 years. As traditional foodservice margins stand, few independent restaurateurs have the ability to hire a professional to build their own custom menu system. Between paper menus and PDFs (a format which is now over 30 years old), the display methods widely used by the hospitality industry today were not made for the generations to come.
The pandemic jump-started a once-in-a-generation re-platforming of the food-service space - but small businesses are about to be blindsided by Hospitality 2.0 unless Smart-Menus step in to help.
How Can a Smart-Menu help Restaurants?
Foodi Menus is revolutionizing the way customers interact with their favorite eateries, by ushering them into the digital age. The Smart-Menu system we’re building enables any restaurateur to easily create enticing, interactive, mobile-optimized online menu experiences for just $35/month. Our goal is to simplify menu management and marketing for food-service teams while improving the menu experience for customers at the same time. We’re the bridge that connects small business with enterprise-level technology in an environment intentionally designed for the wants, needs, and (most importantly) capabilities of independent food-service providers.
Currently, 7 out of 10 US eateries are single-unit operations - the vast majority of which rely on antiquated paper or PDF menu displays that don’t connect to the rest of their systems. As a result, restaurateurs are unable to access and make use of the vast amounts of data that can be utilized to improve their marketing, upsell menu items, enhance dining experiences, and create more efficient front-of-house operations. A better menu, a Smart-Menu, is the key to unlocking profit margins well beyond the 3-5% the hospitality industry has been historically known for.
At Foodi, we realize managing a visually appealing Smart-Menu can be difficult - so we created a better way to do it. Streamline consistent updates for engaging, dynamic, and enticing menus through our online platform. If you're ready to see how a Smart-Menu can transform your business, create one today. Set-up is quick, easy, and we're available to support you every step of the way.