How COVID-19 Forever Changed the Restaurant Industry

Two years ago, the World Health Organization declared COVID-19 a pandemic. Since then, the restaurant industry has changed dramatically. 

The restaurant industry was arguably one of the industries affected most by the COVID-19 pandemic. Not only were the doors of dining establishments shuttered for weeks following national lockdowns, but even upon re-opening, they were forced to operate at reduced capacity as well as implement additional sanitation measures to help reduce the spread of the potentially deadly virus. Now, restaurants stand in a unique position after undergoing drastic changes and innovations that led to a more consumer-focused industry, changing the dining landscape for the foreseeable future.

As the nation continues to find its economic footing, other repercussions have arisen following the pandemic, including staffing shortages, inflation rates that haven’t been seen in decades and an ongoing supply chain crisis, all of which are causing a rise in menu prices and hesitancy from consumers. 

With an entirely new way of living forced upon consumers, restaurants were required to pivot to continue serving customers while also keeping everyone safe. QSR Magazine said that the industry’s focus on consumers was expedited due to the COVID-19 pandemic with innovative developments in technology such as contactless ordering and delivery, new loyalty programs to encourage guests to visit establishments and other ways in which the food industry pivoted to retain customers and attract new ones. Throughout 2021, quick-service restaurants reported same-store sales growth of 10.15%, drive-thru sales were up 46.98% and delivery rose 84.53% from 2020 to 2021. 

“The customer has spoken,” Rob Lynch, Chief Executive Officer of Papa John’s, told QSR. “They want to get food brought to them or get food that is ultra-convenient. And for a long time that was the drive-thru window. Now, technology is changing that. I think the brands that embrace that and can make it work in their economic model will be the ones that continue to outpace the industry.”

David Portalatin, a food-industry adviser at The NPD Group and author of "Eating Patterns in America" believes that despite the obstacles that have popped up along the way as the industry navigated the pandemic, it stands in a much better position for full recovery down the road. 

“We’ve really just fast-forwarded years into the future in a very short period of time,” he told QSR regarding the innovation of the industry.

However, a timetable for complete recovery isn’t quite clear as some consumers remain hesitant regarding the restaurant industry, especially with current inflation levels.

According to Deloitte’s Global State of the Consumer Tracker, the restaurant industry is still working its way back to where it was pre-COVID and may not fully recover. The poll found that many consumers plan to buy fresh food and cook at home more than they did before the pandemic. 

“While restaurant dining will surely increase from today’s levels, consumers are telling us frequency will remain stunted compared to 2019, at least in the medium term,” Deloitte stated in its report. “Cooking is a cheaper option and millions will exit the pandemic in much worse financial shape. Roughly one in three Americans are worried about making upcoming payments and the same number are concerned about their savings and credit card balances.”

Even with consumer uncertainties about their finances and economic recovery, the future looks bright with its continued innovation and technological advancements that allow brands to focus on consumers.