Restaurant owners say hiring is becoming an increasing challenge

After a dire 2020, the restaurant industry is staging a comeback, but headwinds will likely keep it from bouncing back to 2019 levels, a new report shows.

The National Restaurant Association projects restaurant and food service industry sales will jump nearly 20% to $789 billion this year, from $659 billion in 2020. But the projection is still far below pre-pandemic sales of $864 billion, the group said in its midyear “State of the Industry” report.

Pent-up consumer demand, stimulus payments and vaccine availability fueled restaurant sales in the first half of the year and helped restaurant owners climb back from the losses the industry faced during the early months of the health crisis.

But serious challenges such as labor shortages and rising food and fuel costs are limiting gains. Even more worrisome, a resurgence in Covid-19 cases in recent weeks is clouding the picture for the months ahead. It has delayed plans for some companies to return to the office, limited travel and could impact consumer behavior.

“2020 was certainly the most challenging year in the history of the restaurant industry, and 2021 is shaping up to be the year of transition and rebuilding,” said Hudson Riehle, senior vice president of the trade group’s research and knowledge division.

“There are recruitment and retention challenges, food cost challenges, rapid changes in consumer demand for both on site, and off-premises dining … but the pandemic impacts still are being dealt with on a week-to-week basis,” he said.

Owners are also grappling with how to handle vaccination requirements.

At Olamaie, a modern Southern food restaurant in Austin, Texas, owner Michael Fojtasek is short three employees and has been requiring vaccinations. He said his vaccine mandate hasn’t hurt the hiring process so far.

He opened a second business, Little Ola’s Biscuits, two months ago as a spinoff of his main location. Things are going well for the new business, which offers a contactless, curbside model, but Fojtasek said the future feels uncertain as the pandemic wears on.  

“Our top challenge today is uncertainty,” he said. “As operators, we don’t know the best pathway in order to run the business. We are all, as we have been from the beginning, trying to figure it out for ourselves. And I would argue that we haven’t had a great amount of leadership from our elected officials around this for the hospitality industry.”