As we wrap up another year, we decided to continue our little tradition and look back at the year that was and see what trended, changed, and affected the restaurant industry. And whoa, boy. This year was a lot.

From increased restaurant unionization to record-high inflation, 2022 was, overall, a pretty rough year for restaurant operators. So, if you’ve still in business, congrats on weathering the storm and may there be farer weather on the horizon.

Here are our top restaurants stories of 2022.

Restaurant Workers Increase Union Efforts

The labor movement gained a lot of momentum across the US in 2022, and restaurants were not spared from worker dissatisfaction.

What’s causing this push? A perfect storm.

Restaurant workers were often abused during the apex of the COVID pandemic in 2020 and into 2021. This caused a swath of workers to leave the industry (either voluntarily and/or by death). This forced workers that remained to work longer hours or do more in shorter amount of time. Despite that, industry wages in the industry remain oppressively low. Throw in a dash of heavy inflation in 2022 and you’ve created an environment where workers have no choice but to unionize.

Starbucks, especially, felt the spurn of their employees pushing back. The Starbucks Workers Union (SBWU) currently represents about 6,500 workers at over 250 cafes. In just eight months, Starbucks worker unions petitions went from practically non-existent in August 2021 to almost 260 by April 2022. Only a handful have voted against unionizing and many petitions are still TBD.

Meanwhile, Starbucks CEO Howard Schultz has been fighting them every step of the way. Schultz and the coffee chain has been accused of illegal union busting, threats, and creating a “culture of fear” in locations considering unionizing.

And in the current work environment, there’s no reason to think the labor movement will stop any time soon.

COVID Still Affecting Restaurants

The worst of COVID may seem like it’s behind us, but objects in the mirror are closer than they appear.

COVID-19 and its variants are still putting the pinch on restaurants across the US. While foot traffic in restaurants is increasing, it’s still well below pre-pandemic days. Unfortunately, many Americans still don’t feel comfortable returning to indoor dining where seating is often cramped, and folks are maskless and talking.

During the January 2022 COVID surge, 40% of diners put their restaurant visits on hold, while 17% said they hadn’t even returned to a restaurant yet. That’s a huge stressor on restaurants’ budgets. Meanwhile, some restaurants have had to temporarily shut down operations after outbreaks hit their staff.

Restaurants that have bounced back better have been able to utilize outdoor seating to their advantage, where the risk of COVID transmission is lower. Many operations have even continued offering outdoor seating deeper into the season than usual to help accommodate diner’s wants. Other restaurants have continued to put in the time and effort into making sure their delivery program is top notch.

The sad reality is that COVID is here to stay, and operators need to find ways of adapting to the new norm or face the grim reality of shutting down their doors for good.

The Restaurant Industry Struggled with Employment Levels

This year continued the “great resignation” across the US where many employees, disillusioned and fed up with their current work environment, left their jobs. And, of course, restaurants were no exception to this trend, with many operations struggling to employ a full roster.

In April, the quit rate in the accommodation and food services sector was at 9.1%, according to data released by the U.S. Bureau of Labor Statistics. Only five states report having the same number of employees as they did before the pandemic, and a majority of restaurant operators are expecting the labor shortage to continue into 2023. According to the National Restaurant Association, 72% of operators see recruitment and retention as their biggest challenge. Churn rate is about 20% above pre-pandemic levels.

COVID played a big part in the current labor market. Many restaurant workers, facing unreal stress on the job and abuse from guests, left the industry. They decided that the risks far outweighed the “reward”, and understandably so. And while restaurants’ staffing issues are real, they pre-date the pandemic. COVID just amplified a lot of issues already in the industry.

The industry’s low pay is also an active factor in why workers leave the restaurant industry. But it’s not all about the money. Workers also want a safe, healthy, and positive work environment.

Despite all this, the restaurant industry is still expected to grow by 400,000 jobs. But that doesn’t mean operators aren’t feeling the crunch.

Restaurants that are short on staff just can’t produce the same quality product as full teams. Subpar quality food items or service can lead to dissatisfied guests which means bad reviews and even fewer guests. And short-staffed restaurants can also lead to shorter hours, meaning a smaller window to make the same level of revenue – a tall task for any operation.

Inflation Starts to Take its Toll

Despite other issues, restaurants were bouncing back toward pre-pandemic levels of business, and then the globe got hit by unreal inflation. 2022 brought on the highest inflation in 40 years across the world, putting a tight squeeze on diners’ coffers. And when consumers have less free cash to spend, dining out is often one of the first “luxuries” to get dropped.

High inflation is a double sucker punch for the restaurant industry, too. Not only are diners eating out less, but restaurants own bills are also rising.

Many operators are trying to counteract their increased operations costs by raising their menu prices, something we’ve been adamant about for several years. The timing, however, is less than ideal. Pushing the cost onto consumers makes sense but it also puts more of a squeeze on diners, so even fewer dine out.

The silver lining is menu prices are still cheaper than grocery prices, according to the Consumer Price Index. Food-at-home prices were up 13% in September year-over-year compared to an 8.5% increase for food away from home. This is a fact that may be useful to operators looking to market to guests and convince them to keep visiting despite the budget squeeze. “Better food, cheaper food, and a great dining experience.”

Guests also, amazingly, have been very understanding about the price hikes and haven’t complained, according to a Rewards Network survey. Despite this, restaurants expect about 20% of their diners to cut spending because of inflation.