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Restaurant employment numbers are still 8% below pre-pandemic levels

The National Restaurant Association released a mid-year state of the industry report, with details on the labor crisis and effects from the COVID-19 delta variant

The National Restaurant Associated released a mid-year state of the restaurant industry report on Tuesday, calculating all the changes and improvements the industry has faced from Jan. through June 2021.

According to the report, the two biggest challenges to the industry’s recovery are increased customer hesitancy around the delta variant, and the ongoing labor squeeze. According to the National Restaurant Association, restaurant employment numbers are still 8% below pre-pandemic numbers and demand keeps growing.

“The trends from the first half of the year are promising, but a lot of uncertainty remains in regard to the delta variant, consumer confidence, and ongoing labor challenges,” Hudson Riehle, senior vice president of research for the National Restaurant Association said in a statement. “We expect restaurant pent-up demand will remain high in the coming months. However, in this state of flux, maintaining the availability of on-site dining with few capacity restrictions will be critical to keeping the overall sales momentum going forward, especially for full-service operators.”

Here are some key takeways from the report:

Sales have drastically improved since last year

Food and beverage sales continue an upward trajectory despite some setbacks due to COVID-19 variants and variable vaccination levels. Food and beverage sales are projected to reached $789 billion in 2021, up nearly 20% from 2020. The increase was bolstered by increased consumer confidence, pent-up desire and people returning to work.

But restaurants have taken a step backward due to the delta variant

But despite these overall improvements, six in 10 adults have changed their restaurant habits because of the delta variant. Digging into that data further, 19% of adults said they’ve completely stopped going out to restaurants and 37% have ordered delivery or takeout instead of dining out. On the other end of the spectrum, nearly one-third of adults said that they’d be less likely to dine out if required to wear a mask or show proof of vaccination.

Labor remains a huge issue for the industry

The restaurant industry is still on the lookout for nearly one million employees to fill much-needed jobs, and is at about 8% below 2019 levels (the still-struggling full-service industry is 11% below pre-pandemic employment levels). According to the National Restaurant Association, three-quarters of restaurant operators say that recruiting employees was the top concern. However, despite the concerns there is an upward hiring growth trend: July was the seventh straight month on a row of job gains.

Food costs are another major challenge

Food costs are another major hurdle for struggling operators. Food costs are increasing at their fastest rate since 2014, and gas and diesel prices are on track to be at their highest since 2014.

Menu prices have gone up

As a result of both the labor crunch and increased food costs, many operators have had to raise their menu prices. On average, industry menu prices have go on up 4% from January through June 2021. This is their strongest annual increase since the recession began in 2008.

Consumers demand convenience technology

According to the National Restaurant Association survey data, more than half of American adults want restaurant technology to improve the ordering experience and customer service. However, only 44% of respondents said they have placed an order for takeout or delivery in the past year and 18% use mobile pay at a restaurant.

Off-premises is still king

Adults are doing more off-premises dining experiences now (60%) than at the start of the pandemic (58%) and on-premises dining is down across all three meal occasions.

Contact Joanna at [email protected]

Find her on Twitter: @JoannaFantozzi

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