People need to eat, so the restaurant industry is not in any great danger of dying out. This does not mean that it will not develop. Many factors – including new technology, changing social norms and the pandemic – are forcing restaurants to adapt. It is the survival of the fittest.
Staff shortages have skyrocketed
When the pandemic struck, many restaurants closed their doors. Now that they are trying to reopen, they are facing an unexpected problem. Workers do not want to return.
The so-called great resignation that started around April, and The Atlantic says that it is now accelerating. The restaurant industry has been hit particularly hard. In August, almost 7% of employees in the housing and food sector left. National Restaurant Association says three out of four operators cite recruitment and retention as their toughest challenge.
Workers demand better pay and conditions
The Great Resignation has many causes, but The Guardian says low wages and poor working conditions maintains the shortage of labor in the food industry. Workers demand better wages. At the same time, Business Insider says that the tips have gotten worse during the pandemic. This means that there is even more pressure from employers to increase compensation. The New York Times reports that many restaurants have responded with higher salaries and even signing bonuses.
But appeasing workers will be difficult. According to Eater, a strike involving juice chain workers forced nine locations to close temporarily, and the Total Food Service says thousands of McDonalds workers took part in a one-day strike to fight for a minimum wage of $ 15. Even before the pandemic, Modern Restaurant Management said wage and hourly disputes were on the rise, and The Guardian warns of more strikes.
Everything is more expensive
Labor is not the only thing going on. which has risen in price. Inflation reached 5.4% in September, and MarketWatch says that high inflation is likely to continue well into 2022.
According to the 2021 State of the Restaurant Industry Mid-Year Update from the National Restaurant Association, menu prices have had to increase to keep up with increases in food, labor and fuel costs. But restaurant owners may worry that rising prices too much can keep customers away, and rising costs make it harder to be profitable.
Delivery Is Now the Norm
McKinsey & Company says food delivery has become a market for $ 150 billion. The market has tripled since 2017 due to third-party apps for delivery and, of course, the pandemic.
Although delivery has given restaurants a lifeline, it is not without risks. Foodborne illness can become more common if delivery takes a while and the food is not properly isolated. Car accidents are another problem.
Automation Is Up
According to Crunchbase, staff shortages have led to an increased interest in restaurant automation. Fast Casual says that the restaurant industry's automation revolution has begun and provides a list of 10 robots that are used now. These robots can cook, bar, collect plates and more.
Riots, shootings and violence in the workplace are more common
During the last decade, both violent and non-violent demonstrations have increased. In fact, riots triggered by George Floyd's death caused $ 1 billion to $ 2 billion in insured losses, according to Axios . The FBI reports that there were 40 active shooting incidents in 2020 alone. As a restaurant opens its doors to the public, your risk of a violent incident increases.
Does your coverage include?
The restaurant industry is changing at a furious speed. The risks are also changing, which means that insurance coverage must keep up.
If you have not reviewed your commercial insurance for a while, it's time to do so now. Contact BNC's Commercial Insurance team to request a coverage review.