Restaurant market research is a crucial part of success in the industry. COVID-19 completely changed the landscape for commercial businesses. Strategies that worked in the past are no longer effective. Restaurants and food service operators must transform their strategies to stay competitive in an ever-changing industry. With the US restaurant industry estimated at a whopping $899 billion, the competition is more savage than ever.
Whether you’re starting a new restaurant business or trying to relaunch after the pandemic, it’s important that you set aside time for restaurant market research. Restaurant analytics will pinpoint the target market and identify opportunities to excel in your space.
Key Insights from Restaurant Market Research
Using real-world examples, these five key insights emphasize the importance of restaurant market analysis.
The Pandemic’s Effect on the Restaurant Industry
COVID-19 had a profound impact on the restaurant industry. Between all the government-regulated closures and lack of customers, restaurants were forced to lay off workers as they watched their income plummet. The very existence of restaurants run by small business owners was threatened.
The pandemic is now in the final stretches, but the damage has been done. Small business owners are fearful of new regulations that have transformed the industry. And to make matters worse, there’s a labor shortage, so replacing all those laid-off employees presents another challenge.
The effects of the pandemic continue to sweep through the industry. It’s time for restaurants to upgrade their training policies and work hard to retain their current workers if they are going to survive in this brave new world.
Supply Chains Have Been Disrupted
COVID-19 and other global geopolitical situations severely crippled the food supply chain. In November, a survey released by the National Restaurant Association revealed that 96% of restaurant owners experienced supply delays and/or food shortages. 80% of those restaurants also faced delays and shortages of service equipment. This is one of the reasons why we see restaurant prices skyrocket.
As we move into 2023, the supply disruption is expected to continue, so restaurants must adapt. This supply chain disruption can be mitigated by adding secondary suppliers, keeping menus small, and broadening specs.
Restaurant market research allows us to make these determinations and address the issue before it impacts the business. Without conducting the proper restaurant data research, owners are playing a dangerous guessing game, and the next big supply chain problem could potentially break their business.
Inflation Continues to Mount at an Astonishing Rate
Inflation has a profound impact on everything. Rising food costs associated with inflation lead to a host of challenges for restaurant owners. It forces them to raise prices and adapt their menu to keep their loyal customers.
The Technomic and the Bureau of Labor Statistics gave us key insight into the rising food prices. It revealed an increase in the price of turkey (65.8%), cooking oil (77.8%), and chicken (62.2%). Additionally, the cost of all foods has increased by 25%.
These rising prices make it extremely difficult for smaller restaurants to keep on pace with their larger competitors. The go-to strategy is to raise the price of the menu. But that comes with drawbacks. Fortunately, restaurant data analysis shows us that there are alternatives to simply raising prices.
Inflation also instills fear in consumers, and these fears will continue to mount in 2023. Consumers are worried that a recession is on the horizon. However, there will be opportunities for lower prices in 2023. Restaurant market research will reveal those opportunities as they present themselves.
Labor Shortage and Wages are Obstacles
At the end of 2021, sales and labor recovery stalled for many restaurants. When 2022 rolled around, the Bureau of Labor Statistics revealed that the quit rate in the restaurant industry was higher than in any other industry. When we break down the statistics, we can see why that’s the case.
The restaurant industry in the U.S. is severely underpaid in many states. To top it off, these workers receive little to no additional benefits. In order to counter this, many restaurants have increased wages and added benefits packages. But the industry had fallen so far behind that those increases still were not enough to catch up.
With that said, restaurant workers could see a large increase in their gains throughout 2023 in order to close the gap with other industries.
Customer Preference Has Shifted
Newer generations maintain a more active lifestyle and are much more health conscious. The pandemic brought more awareness of the importance of health and nutrition. As a result, consumers tend to pay attention to the nutritional value of the foods on the menu. 61% of diners reported this to be true.
Restaurant owners must become more aware of the nutritional value of their menus. Adding healthy alternatives and placing nutritional charts on menus are tools used by large corporate restaurant chains like McDonald’s.
Restaurant market research identifies trends within the industry and empowers restaurant operators with the information to adapt. Form the proper strategies to meet these new challenges before they negatively impact your business. Restaurant data research requires the proper skillset though, so you should hire a professional agency.
Research Optimus (ROP) is a worldwide leading provider of high-quality and cost-effective restaurant market research. Their expert teams will dig through the market and help restaurant owners identify their target customers and their optimal market. These services also weigh market saturation and even help you form an optimal market entry strategy. Contact ROP today for a free quote.