Restaurant sales

Restaurant sales are exploding, but for how long?

The restaurant industry continued to regain its financial footing in June, but aftershocks from the pandemic have yet to subside.

“The industry is currently extremely strong and is booming. For many operators, they have more business than they can handle, ”said Joseph Pawlak, CEO of Technomic. The Food Institute. “But on the negative side, commodity prices are skyrocketing due to shortages and the shortage of labor is a major problem that is restricting the capacity of the industry.”

Dinner at the restaurant is back

Restaurant sales reached $ 70.6 billion in June, beating May figures by 2.3% and hitting an all-time high for the fourth consecutive month, according to data from the US Census Bureau.

Customer traffic was also almost in line with pre-pandemic figures. Traffic at casual restaurants fell below 3.8% of 2019 levels in June, according to a study by, reported Catering company (July 16).

This week, Yum Brands Inc. and McDonald’s Corp. announced second quarter profits that were better than Wall Street estimates. According to Market surveillanceMcDonald’s net profit totaled $ 2.219 billion, up from $ 483.8 million in 2020, while YUM’s net profit reached $ 391 million, marking a year-over-year increase of $ 185 million. the other (July 29).

Additionally, the increased spending for lunch at the Chipotle Mexican Grill suggests a return to pre-pandemic meal routines for the day. The fast-casual chain reported a 70% recovery in in-store sales last week as well as an 80% retention of digital sales, Market surveillance Noted.

Persistent inflation ahead

While promising, a significant portion of the recent dollar gain in industry sales is due to higher prices. Year over year, inflation rose 5.4% in June.

Numerator data indicates that bars and restaurants are the most popular target for discretionary spending cuts, regardless of purchasing power. If inflation continues, 74% of consumers plan to cut spending accordingly, reportedThe packer (July 20).

A recent survey by the National Association for Business Economics suggests that persistent supply chain and labor market constraints will cause inflationary pressures to persist for the foreseeable future, reported Bloomberg (July 26).

Pawlak notes that the persistent “debacles” of port congestion and an amplified shortage of truck drivers are critical supply chain issues that could extend this timeframe.

“Even though an actual food product and its ingredients are plentiful, finding the materials and packaging for those products is a major problem,” Pawlak said. “So higher inflation is probably there for a while. “

Navigate workforce issues

In addition to perpetual staff shortages, many restaurant workers across the country have become the targets of verbal abuse and legal threats from frustrated customers, reported The Washington Post (July 15th). In addition, “breakthrough” infections of the Delta variant in recent weeks are leading some restaurants to rethink their plans to reopen or require proof of vaccination.

The pandemic has also fueled a growing awareness of the pay gap between workers in the restaurant business and those in other industries. According to the 2020 Report on the status of restaurant workers, food service workers are more than twice as likely to live in poverty as workers in general, and the vast majority work without the right to family or medical leave.

In addition to prioritizing wage competitiveness, Pawlak believes there are other strategies operators can initiate to not only recruit talent, but also retain the staff they have.

“One [tactic] shows them a real career path within the industry or their companies, and how quickly someone can go from production worker to general manager, ”said Pawlak. Other incentives include flexible working hours, health benefits and, overall, “giving each of them a voice on how to do their jobs most efficiently”.