In 2021, the restaurant industry is faring much better than last year, but the rise of the delta variant threatens restaurants in the latter part of the year. On Tuesday (Aug. 31), the National Restaurant Association released its mid-year supplement to the 2021 State of the Restaurant Industry Report, finding that sales are way up from last year.
Across the industry, the report states, food and beverage sales are expected to hit $789 billion this year, a 20% year-over-year increase. In fact, per PYMNTS data, many restaurant operators even expect sales to exceed pre-pandemic numbers. Data from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, find that 42% of restaurant managers expect their 2021 revenue to grow from 2019, and 28% expect them to remain about the same. After all, this year, restaurants are retaining the digital sales growth seen in 2020, while also benefitting from a return to dine-in.
Take, for instance, growing tea and smoothie chain Tastea.
“We’ve got the customers who’ve gotten used to the online ordering, and they continue to do that, but now we’re also even gaining the customers who did not adopt the online,” Tastea Co-founder and managing member Ted Vu told PYMNTS in a June interview. “So as all of our lobbies transition to being open to customers, we’ve started gaining back a lot of customers who don’t like to order through apps, so our sales are actually trending higher than the year before.”
However, for all the hope that was in the air early in the vaccine rollout, plateauing vaccination rates and the rise of the Delta variant are beginning to loom heavy overhead. The association’s report noted that around 60% of adults are changing their restaurant habits in response to the variant, with about a fifth of adults reporting that they have stopped dining in. This presents a lose-lose, because a large portion of consumers also push back against safety measures. Almost a third of respondents reported that they are less likely to dine at a restaurant that enforces mask mandates and/or vaccination requirements.
“There’s a lot of anxiety — there’s anxiety from putting your frontline staff at risk,” Paytronix CEO Andrew Robbins told Karen Websters in a recent conversation. “And you can put them at risk because of the delta variant. You can also put them in less at risk trying to enforce this stuff … Restaurants right now are in a difficult position where they’re trying to make up the rules themselves, because there really isn’t great or uniform guidance for what they should do.”
Of course, most restaurants are in a better position to handle additional outbreaks of the virus now than they were back in 2020, with updated online ordering options and off-premises channels. PYMNTS data find 55 percent of chain quick-service restaurant (QSR) sales are coming in through digital channels, and less than a fifth of all restaurants’ sales are coming from indoor, on-premises dining. Though the delta variant threatens to slow restaurants’ recovery, there is little danger that the months ahead will be a repeat of the early months of the pandemic for restaurants.