Brutal.
That’s how to sum up the last 3 years for the restaurant industry.
But fortunately, it’s steadily making a comeback — albeit with new challenges.
Taking a look back
More than 90,000 restaurants in the U.S. permanently closed as a result of the COVID-19 pandemic, according to the National Restaurant Association’s 2021 report. That represents about 10% of all restaurants in the U.S.
Lockdowns shuttered many restaurants and those that remained adapted their operations to serve customers. Many of these temporary changes, however, are becoming the new normal.
For example, many restaurants have shrunk their dining rooms or are eliminating them entirely. Many are also operating with fewer chefs, servers, and cashiers than before the pandemic.
Optimistic outlook
The food service industry is forecast to hit $997 billion in sales in 2023, driven in part by higher menu prices, according to the National Restaurant Association. That’s up from $824 billion in 2021 — a 21% increase.
Competition is also heating up. In 2023, 47% of operators expect competition to be more intense than last year. Consumer demand is also ramping up, with 84% of consumers saying that going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up.
The challenges that remain
Persistent inflation, rising food costs, and labor shortages are still causing problems for operators.
At the pandemic’s onset, many restaurant employees were laid off. Many looked for other jobs and kept them after lockdowns ended. Now more than 3 years since COVID-19 arrived, and some restaurant gigs remain open.
The restaurant workforce remains below pre-pandemic levels, per the National Restaurant Association, and as of July 2023, restaurants were 64,000 jobs — roughly 0.5% — below their February 2020 employment peak.
Rising costs
Inflation has driven up costs for operators while also stymieing consumer spending. In addition to more expensive labor, wholesale food prices are up nearly 13.2%, according to the National Restaurant Association.
Other expenses – including rent, utilities, and other direct operating costs – generally represent about 29% of sales. For the vast majority of restaurant operators, these three categories are making up a larger share of sales than they did before the pandemic. 
Unforeseen positives?
While the pandemic was undoubtedly devastating for restaurants, it spurred some changes that consumers may appreciate. Roughly 33% of restaurant operators report improved cleaning and sanitation methods since the pandemic began.There are also more convenient options for customers, as 30% of restaurants launched mobile ordering and 26% added food delivery options.
Food delivery as an industry seems to be only growing, too. After rapid growth of about 50% in 2020 and 2021, growth in the global food-delivery sector normalized to 4.1% in 2022, and that trend has continued into 2023.
