If we learned anything the past few years, it’s that seminal events like a global pandemic will not uniformly impact a business segment. Instead, the results will often be uneven and vary by geography, business type and various other factors. And nowhere is this more evident than within the foodservice industry.
For example, the total number of restaurants has shrunk by 3.9% since February 2020, per Chicago-based market research firm Datassential. The closure rate spiked between March 2020 and April 2021 and the total number of restaurants stands at 790,000, down from 822,000 prior to the pandemic. Given the industry’s well-documented woes the past few years, this decline should come as no surprise to anyone.
But not every market experienced a decline in unit counts. While Washington, D.C., was hit hardest in terms of restaurant closures, some areas, like Florida and Texas, had “substantially more openings than closures,” Datassential’s Jack Li said during one of the company’s webcasts this fall.
The same applies when looking at individual industry segments. Only seven restaurant/foodservice operator segments have had positive growth rates since the onset of COVID, per Datassential. Buffets are the segment that lost the most locations. In contrast, the segments adding the most units were vegetarian and restaurants catering to special diets. Of course, the latter two were a smaller group compared to other segments, making it easier to post larger growth rates. Make no mistake, though, consumers’ appetites for plant-based menus remain strong.
In terms of restaurant operating hours since COVID, 19.8% of operators have reduced their hours, 21.6% report no change in hours and 58.6% have reduced their hours of operation, per Datassential. As a result of these changes, the average restaurant is now open 78.6 hours per week, down from 85 hours in 2019, per Datassential. Again, that does not affect all operators equally. For example, a chain like Wendy’s is now operating longer hours than before because it added breakfast right around the time of the pandemic. Denny’s, long known for its round-the-clock service, had only 60% of its units operating 24/7 as of Nov. 1, according to various published reports. And the chain is now looking for ways to entice franchisees to extend their operating hours. On a market basis, only Alaska has seen an increase in terms of restaurant operating hours and that came in at 2.7 hours, per Datassential. In Vermont, restaurant operating hours have declined by 11.3 hours.
It is a lot to process.
As a business leader in today’s foodservice industry, understanding the data and how it applies to you is important. It creates context that can help you make informed decisions about your business, its customers and more. But you can’t get too consumed by the data to the point that the fundamentals of your business begin to suffer. The more challenging and complex the business environment, the more heavily you and your company will have to rely on the fundamentals that make your business run. That includes your ability to communicate clearly and concisely both internally and externally. Doing so can pave the way for you and your business to execute at the highest levels necessary to weather whatever comes next.
