Employee Recruitment, Retention Continues to Challenge Restaurants: Study

The U.S. restaurant industry in on track to post moderate sales growth of 4% this year, and half of consumers say they want to use restaurants more frequently, according to the National Restaurant Association's 2020 State of the Restaurant Industry Report.

This report examines key factors impacting the restaurant industry including the current state of the economy, operations, workforce, and food and menu trends across segments from quickservice to fine dining. 

Key findings regarding economic conditions include:

• Restaurant industry sales are projected to reach a record $899 billion in 2020, with the moderate 4% growth rate mirroring general economic conditions.
• Consumers will continue to be the driving force in the economy, buoyed by a healthy labor market and strong household balance sheets.

“Now in its eleventh consecutive year of growth, the restaurant industry is adapting to consumer preferences faster than ever before,” said Hudson Riehle, senior vice president, research and knowledge group, National Restaurant Association. “Consumers tell us they want to use restaurants more than they are now, and the challenge for the industry is meeting consumers where they want to be. We expect this year will see growth in off-premises options, technology that streamlines operations, and more restaurants that are talking about their increased sustainable and eco-friendly practices.”

Opportunity lies in off-premises

Off-premises will be a prominent force of growth in 2020. To be successful, restaurant operators will look to strike the perfect formula of on- and off-premises for their business as consumers strive for convenience, but continue to look to the social escape that restaurants provide. When asked about ways in which restaurants could incorporate more technology, consumers primarily mention frictionless, convenience- and service-enhancing items, rather than people-eliminating items. Other key takeaways on operations include:

• Restaurant operators are generally positive about business conditions, but they anticipate ongoing challenges that impact both the top and bottom lines.
• Off-premises will be a major driver of sales growth in 2020 and beyond, and many restaurant operators are devoting more resources to this side of their business.
• Restaurant operators agree that the use of technology provides a competitive advantage, and as such are investing in customer-facing technologies that will enhance service and convenience for their guests.

Employment opportunities abound

The restaurant industry remains one of the economy’s most important employers – for a year or for a career. Almost two-thirds(63%) of adults report working in the restaurant industry at some point during their lives; 48 percent held their first regular job in a restaurant. Employee recruitment and retention continues to be a major challenge for operators in 2020, with low unemployment rates and growing job openings. However, of the job openings filled in 2019, nearly half of them were filled by either new entrants to the workforce or people promoted from other positions in the same restaurant. Other key statistics on the state of the workforce include:

• More Jobs: The restaurant industry will provide a projected 15.6 million restaurant and foodservice jobs in 2020.
• Good Jobs: The restaurant workforce is as diverse as the communities it serves, and the industry will offer up additional employment opportunities at all levels of the business this year.
• Opportunity for All: Older adults’ representation in the restaurant workforce will continue to grow, as their numbers in the labor force are expected to rise sharply.

Healthy, sustainable options increase alongside changing alcohol preferences

Consumer interest in healthy menu options will remain strong in 2020, and consumers will make decisions based on the availability of healthy offerings. Alcohol is a key driver of sales in the fine dining segment, with nearly two-thirds of orders including alcoholic beverages. In 2020, alcohol will expand further beyond this segment with operators in all but one category planning to increase their alcoholic beverage offerings to keep up with changing consumer tastes and preferences. Key figures on food and beverage trends include:

• 76 percent of adults say they are more likely to visit a restaurant that offers locally sourced food and 79 percent of adults say they are more likely to visit a restaurant that offers healthy menu options.
• 65 percent of millennials say they are more likely to go to restaurants that offer locally sourced alcoholic beverages.
• 53 percent of chefs indicate that low-alcohol beers and cocktails will continue to rise in popularity in 2020.

“Consumers are embracing the industry more as they continue to shift their spending away from physical items and towards experiences. This opens channels of opportunity and growth in food, beverage, and technology. We’re excited to see how these trends and developments play out in 2020 and beyond,” said Riehle.

Go here for more information or to access the full report.