A current look at the state of the restaurant industryAuthor: MOBI
January always brings a refreshed sense of perspective, hope and goals as we collectively embark on a brand new year ahead. Although the globe seems to be moving aways from lockdowns and pandemic restrictions, it’s no secret there’s still a massive sense of unease in many industries as we start to feel the several lingering effects.
The restaurant industry, like many, is still feeling the sting of staffing shortages, rising prices, supply chain disruptions and beyond. On the other hand, there’s also plenty of positive trends coming from the industry today. So, in January 2023, where exactly is the restaurant industry sitting?
There’s plenty of trends reports circulating the internet today, so we’ve gone ahead and compiled the main trending topics from industry experts and restaurant owners. Not only that, we’ve provided our take on the topics, to show how brands can translate the information and act accordingly.
Industry sales are back and stronger than ever
Finally, restaurant sales are bouncing back. In some cases, better than ever! A recent article focused on the APAC region quoted “annual sales for the year ended September 2022 bounced back to reach a record high of $13.38 billion. This is a return to pre-Covid trading levels and is up 7.7 per cent over the previous year.”
Interestingly enough, although sales appear to also be on the rise across North America, consumer habits are skewing more towards off-premise dining. CNN posted a recent article highlighting how rising prices are altering consumer habits, and considering the cost of doing just about anything at the moment, consumers are opting for take-out more than they are dining in.
Given the state of the economy, this year we expect to see restaurants strengthening their off-premise ordering options to better cater directly to their consumers. Not only have we noticed a shift with our customers relying more heavily on off-premise ordering, we’ve also seen a shift in how restaurants are looking to own more of the guest relationship. We expect this could be good news for QSR restaurants as guests start to opt for more convenience options.
MOBI customers have started opting for products such as Last Mile Delivery, which allow them to manage their delivery offering at higher profit margins than relying solely on third party delivery services.
Adapting to inflation: it’s not always as simple as increasing menu prices
Restaurants are not only increasing prices, they are changing their menus. Desperate times call for desperate measures, with even the biggest brands having had to adapt their pricing scheme and menu options. The Association’s Business Conditions survey of 3,000 restaurant operators shows 87% of restaurants have increased menu prices, while 59% have changed the food and beverage items offered on their menu.
The unfortunate side of this is that many brands are struggling to find a middle ground, where prices are still attractive to their guest base, while also allowing them to maintain their profit margins.
Plenty of uncertainty still remains in the industry as supply chain issues continue and the cost of living crisis begins to affect everyone on a global scale. Restaurant brands need to stay vigilant and on the pulse of their restaurant activity and guest data. Keeping your ear to the ground and your eyes on your brand’s data will allow you to pivot to serve your guests while also maintaining higher profit margins.
Apps are taking the world by storm
If you’re not already working with a mobile app, or if you’ve got an app and you’re ready to take it to the next level - 2023 might just be the time to put the pedal to the floor. User app adoption is on the rise, and after McDonald’s reported just over 40 million people downloaded their native app last year, we expect to see many brands jumping on the bandwagon.
Brands are also looking for more ways to enhance their app experience, by introducing enticing loyalty programs, contactless ordering options, coupons, and by adding delivery options direct from the source.
As brands look to make stronger connections with their guests through additional channels, looking to a mobile app will feel like a natural next step. However, in our experience, an app is not for the faint of heart if you’re not prepared to boost its usage through marketing and promotion.
We always recommend working with a strategic partner to help brands review their current capacity and find the best way forward when it comes to introducing a new and profitable channel to your guests.
The connection between the restaurant industry and tech is stronger than ever
At the top of the year, two in three restaurants reported being understaffed. With business challenges like this one and more, it’s no surprise tech adoption is rampant in the industry this year. The good news, guest adoption is also high, making it easier to introduce technology and see a positive return on investment through higher guest usage.
Although there’s plenty of restaurant tech to choose from, it’s important to make strategic choices. Brands should identify one or two pain points they are already experiencing or expect to experience this year and look at what technology will provide an immediate solution. It’s good to make changes, but always consider quality over quantity. This will ensure your brand, staff and guests can get the most out of a new experience.
So, what should brands do now?
This recap at a glance sheds some light on where the industry may be headed in 2023. Although there’s plenty of optimism for a more “normal” year in 2024, by staying vigilant and attentive to trends in the industry and economy, brands can find ways to climb to the top. If you’re unsure how well equipped your brand is for what’s to come, talk to an expert for free today.
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