Bonji Foods Aficionado Smart Brief: Volume 57
Hi all, welcome back to the Bonji Food Aficionado Smart Brief! Happy Tuesday and we hope you had an amazing weekend! The word “recession” has been thrown around a lot as of late, which is often a frightening experience for most small business owners, businesses in general, and as a whole the American consumer. However, the restaurant world may be in for a better 2023 than other industries. We've recently seen massive tech companies hit their employees with record-breaking layoffs. On the contrary, Chipotle (along with other chains) is hiring at record rates. Nearly every restaurant you pass by is looking for some form of labor. Now, we want to take a look into what the labor environment may have in store for restaurants this year.
What Restaurants Should Expect From The Labor Market If we look into the past, economic downturns have led to many industries having to lay off employees. Yet, the restaurant industry has always remained relatively insulated. Of course, there have been periods of slowdowns but rarely do we see restaurants go through massive layoff periods. Furthermore, even with talks of recession, the restaurant industry is expected to have one of the fastest-growing occupation spaces through 2031. In 2023, the restaurant industry is expected to see continued growth in terms of both labor and revenue. In fact, 60% of small restaurant owners expect 2023 to be a good year, with about 25% saying they think it will be “great.” With more and more consumers opting for takeout and delivery options, the demand for restaurant labor is increasing. In order to meet this demand, many restaurants are investing in technology or are desperately searching for workers. Even with inflation playing a role, restaurants usually aren't raising prices at the rate grocery stores are. Which, in turn, may boost customers at restaurants even during recession periods. One of the main challenges facing the restaurant industry in terms of labor growth is finding and retaining qualified workers. To address this challenge, many restaurants are offering competitive wages and benefits, flexible schedules, and opportunities for advancement. This will most likely be the toughest part for small restaurant owners. Not only will they have to find skilled workers, but they will also have to pay them well enough to keep them around. Restaurant worker turnover is notoriously a struggle, especially when the cost of living is rising. Yet, the optimistic restaurant owners of the world still say they plan to hire employees in the coming months. Actually, 87% of restaurant operators stated that they plan to hire in the next 6-12 months. Thus, it doesn't seem like paying employees is too much of a deterrence as of yet. Despite these challenges, the restaurant industry is poised for growth in 2023 and beyond. By offering competitive wages and benefits, investing in technology and automation, and adapting to changing consumer trends, restaurants can attract and retain the workers they need to succeed. As the economy continues to recover from the pandemic, the restaurant industry is expected to see continued growth, providing opportunities for both employers and employees alike.
"What is not uncertain is that consumers still have to eat. And even if those consumers continue to tighten up their spending, restaurant inflation remains materially lower than grocery prices and, therefore, a more attractive option in a downturn. Those restaurants will need the labor to maintain that attractiveness and that outlook, for one, looks relatively rosy."
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