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Restaurant Industry Sales to Hit $898 billion in 2022

Restaurant industry sales will reach $898 billion in 2022, per the latest forecast from the National Restaurant Association. The NRA released this data as part of its 2022 State of the Restaurant Industry report.

This represents 12.4% in nominal growth from 2021. Real growth translates into a 6.6% year-over-year increase. From 2019 to 2022, overall industry sales will decline 11.5% in real terms, per the NRA’s projections. In other words, expect 2022 to be another year of transition for the industry.

Specifically, more than half of operators surveyed by the NRA say it would be a year or more before business conditions return to normal. Operators will continue to try to overcome significant headwinds in the form of food, labor and occupancy costs, all of which they expect to remain elevated for the coming year, per the NRA.

Labor remains an industry focal point. Seven out of 10 restaurants report not having enough employees to meet customer demand, per the NRA. As a result, approximately 50% of restaurant operators in the full-service, quick-service and fast-casual segments expect recruiting and retaining employees to be their top challenge in 2022, per the NRA. This comes despite restaurant operators adding 1.7 million jobs in 2021, bringing total industry employment to 14.5 million employees at the end of last year. The NRA projects industry employment to grow to 16.5 million by 2030.

Supply chain issues continue to affect all operators. Along those lines, 9 out of 10 full- and limited-service operators report supply delays or shortages in recent months, per the NRA. Looking at foodservice equipment and supplies, 8 of 10 operators report a delay in this area, per the NRA. Likely in response to labor and supply chain challenges, operators continue to tinker with their menus. For example, 6 of 10 full-service operators reported their menus contain fewer items than before the pandemic, per the NRA.

To help offset some of their business challenges, look for operators to continue to turn to technology. In fact, 8 in 10 operators told the NRA that investing in technology provides them with a competitive advantage. In the coming year, operators plan to ramp up investments in technology across such areas as online or app ordering, reservations, mobile payment, delivery management and addition to back-of-the-house technology.

Performance will continue to vary greatly by segment throughout 2022 and many segments have a ways to go before fully recovering. For example, limited-service restaurants will see sales swell to $355 billion in 2022, per the NRA. In real terms, this means 1.9% real growth for this year compared to 2021. Looking at the three-year window of 2019 to 2022, limited-service restaurants will experience a 3.2% decline in sales in real terms.

Sales at full-service restaurants will total $289 billion in 2022, a 5.3% increase from 2021 in real terms per the NRA. From 2019 to 2022, the NRA projects this segment will decline 12.2% in real terms. And sales at bars and taverns will hit $21 billion in 2022, an 11.7% increase in real terms. This growth will likely be due to relaxing COVID-19 protocols. Looking at the bigger window of 2019 to 2022, the NRA projects this segment to experience a 16% decline in real terms.

“Restaurants and their patrons have found themselves in a ‘new normal.’ Given emergent technology, changing consumer behavior and dining preferences, and the extraordinary challenges of the last two years, the industry is unlikely to ever completely return to its pre-pandemic state,” said Hudson Riehle, senior vice president of the Research and Knowledge Group at the National Restaurant Association. “While recovery speed varies across the industry by segment, the constant innovation and sustained flexibility of restaurant operators are creating a new future for the restaurant industry. There will continue to be ample opportunities for growth in 2022 and beyond.”

One glimmer of hope: there remains pent-up consumer demand for restaurants. In fact, 51% of adults say they are not eating at restaurants as often as they would like, which is an increase of 6% from before the pandemic, per the NRA.