Last January we naively looked back at 2020 thinking we had put down year like no other. While that was true, 2021 didn’t deliver or bring us back to the sense of normal we were all looking for. Instead we travelled on a similar path to the year that had gone before it fraught with ups and downs. As we start off into a new year with renewed optimism once again, we look back on the highs, lows and the big news items of the last 12 months.
Pizza withstands harsh blows dealt out by the pandemic
There is no debating that 2021 brought its own set of unique challenges for the restaurant industry. In order to mitigate the spread of the virus, various measures and restrictions at both a federal and local level continued to be put in place throughout the year. For the hospitality industry, who sole purpose is to attract and invite custom into their business, the pandemic was ruthless. Major companies like The Cheesecake Factory announced furloughs, and other companies like Union Square Hospitality announced layoffs. However, when it came to Pizza, this segment experienced significant sale gains.
Pre-2020, unbeknownst to pizza operators, their business structure was built to somewhat survive a pandemic. While it hasn’t been a complete breeze for all pizzerias, a confluence of factors has insulated a lot of pizza companies from much of the coronavirus-induced damage that happened to many other eating establishments this year. Everything from delivery, to online ordering, value and appeal, “Pizza” was, and continues to be better structured to deal with the harsh blows the pandemic so often dishes out.
Fraudsters cashed-in on the rise of digital ordering
Something pizzerias didn’t manage to escape the effects of during the last year was fraud. Fraud is nothing new to any restaurant or eating establishment – but during 2021 there was a significant increase in fraudulent activity. With dine in restrictions, digitally ordering became a lifeline for many business. Food operators welcomed and appreciated the massive uptick in online orders – but there weren’t the only ones. Fraudsters were only too delighted to use the increase in order volume to hide their fraudulent activity.
Not surprisingly, fraud is proving to be very costly for QSRs – in some cases detrimental. For an industry that is under huge strain from the effects of the pandemic, this is one less financial woe they could do without.
See you in court – Restaurants say enough is enough to third party greedy ways
Pandemic or not, no year could pass by without some sort of third-party related story featuring in the media – and 2021 was no exception. The year started off well with what seemed as a well-intentioned offering from delivery companies to help restaurants. In many cities and states, they agreed to commission caps, “voluntarily” cut their commissions and deferred the collection of fees. But as they say, leopard can’t change its spots.
Under the surface it turns out that third parties used “unfair and deceptive tactics to take advantage of restaurants and consumers who were struggling to stay afloat”. Of course, their most recent actions were much to the ire of the restaurant industry. Owners and operators from Chicago to Washington DC, New York, California and everywhere in-between finally had enough – enough of the hoodwinking and gaslighting not just throughout the pandemic, but since the very beginning. As a result, multiple lawsuits were filed by several states and local municipalities against third party deliver companies in particular DoorDash and Grubhub. 2022 should be interesting.
Attracting and retain labor posed a significant challenge
Labor was a massive problem throughout 2021 – and most certainly will continue into 2022. Despite a record high unemployment rate many restaurants during the year reported of having to close for short periods of time due to being unable to find and hire staff. There were a number of reasons that contributed to ongoing labor shortage in the restaurant industry – from reluctantly to return, to re-education, cost of living and relocating, to pandemic related restrictions preventing overseas workers from travelling and high competition – the list goes on.
While the issue threatened to sabotage operators’ best efforts to stay financially afloat in 2021, on the upside it also forced businesses to become more creative in terms of recruitment, and similarly how to improve productivity and work with fewer people – Which leads us nicely to our next point.
2021 was the year of tech investment
With the ongoing challenges with labor, dining restrictions and a new focus on safety, 2021 saw an acceleration in restaurant technology investment. Pre-Covid, new digital interfaces such as mobile ordering, contactless, tap and pay, mobile wallets, digital tipping, self-service stores, dedicated pickup solutions etc. were seen by many as a nice-to-haves but not serious profit drivers. But que a pandemic – and all the realities of trying to operate a business through it – those opinions changed overnight.
Investing in and implementing relevant self-service digital technology become increasingly significant over the past year. While an increase in safety awareness amplified demand, self-service technology provides a solution to lessen the burden of staff shortages, increase operations and protect businesses in the face of unpredictable change. In addition, it helps deliver the speed and convenience customers expect, boosting (much needed) revenue along the way.
Q4 and the pandemic continued on – Delta, mandates and compliance
Towards the end of the summer there was a feeling that were beginning to see a reprieve from the pressures of the pandemic – that the days of high case numbers and severe restrictions were somewhat dissipating. But alas, the year most certainty when out with a bang.
The Delta variant arrived and delivered a massive reality check on thinking we were somewhat rid of rules and regulations. The hospitality once again being heavily targeted. Masking wearing in doors was once again recommended, proof of vaccination was also required for indoor dining and some states and local municipals reinstated various mandates to curb the spread of the new variant. And if dealing with an unrelenting unpredictable pandemic wasn’t enough, restaurant operators still need to run a business and keep up with all the day to day admin, laws and regulations – regardless of what is going on outside.
Typically blogs like these like to hypotheses what are the big trends for the coming year will be and what restaurants should watch out – but no one needs a crystal ball to know that the first half of the year will still be dominated by Covid and its many variants it creates. Undoubtedly, regaining customer confidence and trust in eating indoors will continue to be a challenge for restaurants in 2022 – as will the ongoing lack of labor. But, one thing is for certain, we weathered 2021. And like every New Year, we will enter 2022 we a renewed sense of optimism and the hope that this year will be better.