AI, automation tech powering up productivity and profitability for restaurants

It appears the foodservice industry in North America has just about cleared the Covid-19 hurdle that initially rocked the sector beginning in 2020.

Sales in 2022 for the top 500 U.S. restaurant chains grew 8.2 percent to USD 393 billion (EUR 366 billion) compared to 2021, according to research firm Technomic in its latest 2023 Top 500 Chain Restaurant report.

“Unprecedented levels of foodservice inflation had a major effect on the industry’s largest chain restaurants in 2022,” Technomic Director of Industry Research and Insights Kevin Schimpf said of the report’s findings. “Soaring menu prices proved to be the biggest factor behind the 8 percent sales growth posted by Top 500 chain restaurants in 2022. Location development also boosted chain performance, as the Top 500’s overall footprint expanded beyond its pre-pandemic total.”

Fellow foodservice insights company Datassential, in the fifth edition of its Top 500 report, similarly declared that the largest restaurant chains in the U.S. “have more than recovered in size from what they lost during the pandemic.”

“The Top 500 restaurant chains had a total of 232,937 units in 2022, up 1.1 percent from 2021. This highlights how the industry has stabilized after a few tumultuous years,” Datassential said.

Canada’s leading restaurant chains also saw gains last year, Technomic discovered in its 2023 Top 200 Canadian Chain Restaurant report, released at the end of May.

“Total sales for Canada’s Top 200 chain restaurants hit USD 40 billion [EUR 37 billion] in 2022, improving by 15 percent compared to the prior year,” Schimpf said. “While overall chain restaurant sales managed to bounce back to pre-pandemic levels, the recovery was largely driven by rising menu prices and the top-heavy growth of the industry’s top-ranked players.”

With pandemic concerns moving deeper into the rearview, obstacles related to inflation and labor are taking their place, Datassential Vice President of Customer Experience Kelley Fechner said.

“Things that everyone’s concerned about, especially operators, are rising food costs, inflation, ingredient shortage, etcetera,” Fechner said.

Additionally, Fechner added that “rising labor costs and staffing issues remain some of the most salient challenges for operators, falling just short of inflation.”

Of the operators surveyed by Datassential as of March 2023, 67 percent listed rising food costs as their leading challenge, with inflation (42 percent), rising labor costs (36 percent), ingredient shortages or unavailability (32 percent), recruiting and hiring hourly staff (31 percent), and retaining hourly staff (29 percent) also making the list of top complications.

“This is not going away, and we’re seeing technology come into play,” Fechner said.

May AI take your order?

The number of operators turning to automation robotics and artificial intelligence (AI) is slowly on the rise amid persistent labor shortages.

“While once there was a fear that tech and robotics would replace workers, the hospitality labor shortfall means many of those workers have moved on to other industries. As margins continue to be squeezed, tech investments will pay off in the long run,” Mike Kostyo, Datassential’s trendologist and associate director, wrote ...

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