The restaurant industry got hit hard by COVID. Three years out, things have settled down considerably. Still, business owners all over the country are struggling to pick up the pieces of the last two years, while navigating the challenges of the present.
None of that is to say that it is impossible to be successful as a restaurant owner today. In this article, we take a look at what it is like to run a restaurant in a post-COVID world.
Labor
You’d have to have been living under a rock for the last few years to have missed news of the ongoing labor shortage. During the pandemic, people quit minimum-wage jobs in droves for a combination of reasons. Many federal aid critics cited high unemployment benefits as a big motivation for people to stop coming to work.
Conversations with American shift workers paint a slightly different picture. Sure, people knew about unemployment, and how it had changed shape a little bit in the face of the pandemic, but they also began to reevaluate what they were willing to do for money.
Can I just stop you right there?
Oh, I didn’t see you there. Sure. Go for it.
The pandemic is pretty much over now, isn’t it? So what do I care about why people quit their jobs two years ago?
Well, that’s just the thing. The pandemic permanently re-framed the way people saw their minimum-wage jobs. They were essential. But they could also be sidelined for weeks at a time in accordance with some lock-down restrictions.
When they did come into work it was with the understanding that they might be exposing themselves to a dangerous virus. Suddenly, working in a restaurant didn’t feel safe anymore.
All of this was a lot to ask of a person who was making $10 an hour. So people quit in droves. Now, things with the pandemic have calmed down, but restaurants are still struggling to staff their shifts. American labor is no longer in a state of crisis. In fact, experts largely agree that the advantage will shift back to the employer later in the year.
However, there are still things to keep in mind as you consider staffing your restaurant.
- Compensation: Minimum wage doesn’t cut the mustard in many parts of the country anymore. “Unskilled laborers,” as they are called, are still in high demand, which means they can sell their time for more money. It’s not uncommon for restaurants to pay their staff $15-20 an hour. Even jobs that used to primarily be compensated in tips are now receiving minimum wage as well in many parts of the country.
- It may be hard to fully staff your shifts: Over the last few years, it’s been common to walk into restaurants that are half empty and find out that you still have to wait for a table. Why? Even though there are spots open, there aren’t people available to cover them. Restaurant owners are still finding it hard to find enough people to cover their shifts. Higher compensation can help, but with rising expenses in the form of rent, ingredients, etc. there is only so much you can do.
It’s More Expensive Than it Used to Be
Then there’s that inflation everyone has been talking about. Eggs that cost $7 a dozen. Produce and meat prices are going through the roof. Post-pandemic restaurants have found themselves in a tricky position when it comes to ingredient prices. On the one hand, they need to turn a profit. That’s hard to do without raising their prices. On the other hand, the more expensive the menu gets, the fewer people will come in.
Unfortunately, this is a calculation for which there is no easy answer. Most restaurant owners aren’t trying to beat inflation but merely survive it.
People Don’t Go Out to Eat as Much as They Used to
It’s also true that people simply don’t go out to eat at restaurants as much as they used to. This began as a matter of necessity. In many parts of the country, it was literally against the law to sit down in a restaurant, making the question a moot point.
However, as people adjusted to pandemic life, they became used to planning and cooking their own meals. Now, many people who never thought of themselves as cooks before have made it a normal part of their routine. And because inflation is hitting everyone, this is a social change not necessarily poised to correct course anytime soon.
Less Competition
Around 90,000 restaurants closed during the pandemic. Sad news for restaurant owners and the communities that they used to serve. However, this mass closing of eating establishments has left a large hole that will need to be filled by someone.
That person could be you! It’s a pretty basic economic principle. Supply and demand. The fewer restaurants there are in a town, the more business each of them will do. Of course, you still have to check all the other boxes. Good food. Sensible prices. Friendly staff. Great atmosphere.
Still, for the time being, at least, the hospitality industry is wide open for newcomers.
Almost All of That was Bad News
Did you read the last section?
The one about how almost 100,000 restaurants closed in two years? Not very heartwarming!
Well, ok. Sure. It’s not the easiest time in the world to be a restaurant owner. But things do seem to be looking up. The recession that experts have been forecasting for months now isn’t impacting average Americans the way economic crises of the past have.
That means that people do still have money in their pockets, and they might be willing to spend some of it on your food. There are challenges. Staffing. Inflation. But these issues are cyclical. They creep up. Eventually, they go away.
None of that is to say that this is the most ideal time to open a small business. But it’s never going to be. There are always going to be challenges. If you are serious about owning a restaurant in the post-COVID era, you need to figure out how to navigate the hardships and make them work for you.
Photo Credit
Restaurant image by StockSnap from Pixabay
Kitchen image by Werner Heiber from Pixabay
Guest Author Bio
Sarah Daren
With a Bachelor’s in Health Science along with an MBA, Sarah Daren has a wealth of knowledge within both the health and business sectors. Her expertise in scaling and identifying ways tech can improve the lives of others has led Sarah to be a consultant for a number of startup businesses, most prominently in the wellness industry, wearable technology and health education. She implements her health knowledge into every aspect of her life with a focus on making America a healthier and safer place for future generations to come.
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