restaurant employees working in a kitchen

The U.S. economy has sustained growth over the past year. However, this is not a restaurant industry trend. The restaurant industry has not been growing at this same pace as the U.S. economy. In fact, restaurant sales have been declining since the spring of 2016.

We’ve talked about the coined “restaurant industry slump” that we’ve all been dealing with, however, it looks like we are going to be seeing these trends for a bit longer than we had hoped.


Chart By Author. Data from Black Box Intelligence.

Breaking down these restaurant industry trends.

Grocery store prices are dropping.

Grocery store prices nationwide have been declining over the past year. If only running a restaurant and keeping an updated menu was as easy as strolling over to the freezer section. You know how much goes into each and every dish you serve, and it’s more than just paying for food or labor. Updating restaurant menus based on market prices is something you have always done – but it is even more important and impactful to your bottom line when margins are running low. There have been changes in the egg, fish, and meat markets over the past few months- and chances are, the prices will continue to fluctuate.

Labor, Labor, Labor.

As the restaurant turnover rate continues to increase, restaurants scramble to keep ahead. Since finding skilled labor is proving more and more difficult, restaurateurs are changing their concepts. Instead of centering on an Italian concept, for example, which requires a lot of skill and experience, many are edging toward very focused concept with minimal training is easier to hire for. Thomas Kim, owner of The Rabbit Hole in Minneapolis stated similar pain points.

“My issue was not a lack of job seekers, it was a lack of qualified applicants. “Out of 20 people, maybe one person – at most two – would be even semi-qualified for us to sit down with them. People are looking at kitchen jobs as the same as entry level retail jobs. They perceive that knowing what a knife is, means they have a skill set they could apply to this job.”

As the pressure rises in towns that rely on hiring often like Cape Cod, MA, restaurants are feeling the pain.

Tom Fazio, the owner of Fazio’s Trattoria for the last 30-years, has been searching but finding no success.

“We have put ads in the paper for waitstaff and for cooks for that past few months. Nothing. Tourists come for two weeks and want a nice meal. We’re down to a bare bones crew. I’m in the kitchen, my wife is washing dishes, we’ve got two waiters, but what are we supposed to do on July 4th weekend? How are we supposed to serve and process all of these people? We do what we can do. I’m a chef and I need help.”

Let’s NOT do lunch.

According to research about restaurant industry trends by the NPD Group Inc., Americans made 433 million fewer trips to restaurants at lunchtime in 2016, resulting in roughly $3.2 billion in lost business. Making it the lowest level of lunch traffic in at least four decades. Restaurateurs have been feeling this for month, and it’s shown in the numbers.

Bitter & Twisted Bar

Consumer preferences are changing.

This is no secret. As time goes on and technology advances, tastes change. The thing about taste is that it comes and goes – and it should not be the reason you rework your concept. There are ways to adapt, however. The “Small Plate” trend has been sweeping restaurants across the country, and millennials can’t get enough. Many restaurateurs are adding options that appease this new type of diner, also known as The Millennial. You’ve been noticing the trend, restaurants focused on one thing that they do well, like Korean fried chicken, dumplings, or crepes. Which leads into our next point, the labor shortage.

“We have put ads in the paper for waitstaff and for cooks for that past few months. Nothing. Tourists come for two weeks and want a nice meal. We’re down to a bare bones crew. I’m in the kitchen, my wife is washing dishes, we’ve got two waiters, but what are we supposed to do on July 4th weekend? How are we supposed to serve and process all of these people? We do what we can do. I’m a chef and I need help.” – John Fazio

The minimum wage question.

It’s no secret that restaurant minimum wage has been rise over the past decade. As more and more cities and states vote to raise the hourly rate, many restaurateurs feel forgotten. Running a tipped business is very different than a typical hourly rate one. Since restaurants operate on very thin margins already, many fear that raising the minimum wage and not creating a tipped minimum wage will kill many small businesses.

Yes, we are in a restaurant industry recession. However, that does not mean it is here to stay, or something that we should be worried about. Restaurateurs are tackling these issues head on and relying on technology and restaurant analytics to better understand and operate their business.

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Hannah can be found riding the slopes of New Hampshire by winter and riding the waves of Rhode Island by summer. In order to satisfy a constant sweet tooth, you can find her bouncing between Ellie's Bakery and Pastiche, both in Providence, RI.