Are American eateries on the verge of extinction or are they undergoing an evolution?

For the US restaurant industry, the COVID-19 pandemic of 2020 came like a punch to the gut, leaving no means to operate and almost nil hope of recovery. The restaurants and favorite haunts we took for granted were struggling to make ends meet. With the sudden dip in the demand for food orders, all may have seemed lost at the moment.

Fortunately, the world is going through a new phase of resiliency that has forced the industry to think out of the box and apply unconventional techniques to survive and thrive in the new normal. And this resilience has gifted us solutions to revive and re-launch the US restaurant industry in 2021 with amazing gusto.

The U.S. restaurant industry and covid

Fresh into 2020, restaurants were brimming with business as usual. Every place was busy catering to their loyal diners, unaware of what the future held. There were rumors of a deadly virus in the background, but, at the time, never could anyone have imagined the extent of damage it would cause.

Then everything changed.

With countries across the globe going into different variants of lockdown through the course of 2020, travel and hospitality were perhaps the most affected industries. The sudden and total abandonment by patrons left many restaurants scrambling to save their dying businesses. In the US alone, the industry saw a 19.2% drop in restaurant and bar sales during 2020. A record number of restaurant chains that were set up after generations of hard-work have shut down – the figure stands at an estimated 91,000 family-owned restaurants and bars.

Reversing Covid’s disastrous toll on the restaurant industry in 2021

A sliver of hope

COVID-19 has given us a lot of time to think, a lot! In 2021, the US restaurant industry renewed its hopes to turn things around, partly due to the $1.9 trillion American Rescue Plan Act, a COVID-19 relief package, which includes the $28.6 billion restaurant relief fund. In the prevailing new normal, restaurants are not just faced with winning back business; they are challenged by the need to redefine perceptions on dining out.

Three key 2021 restaurant trends to watch out for

Customers in the post-Covid world do not just demand superior dining experiences; they demand these experiences are supported by contactless technologies, like digital menus and digital payments. This seems easy enough, particularly in a predominantly cashless economy like the US. The emergence of new and innovative business models, like ghost kitchens, is promising to say the least. Add to this the vaccine-induced hopes of a covid-free 2021, and it would seem the industry is ready to bounce back stronger than ever.

1. Digitalization of services

Despite the almost euphoric optimism of 2021, Customers are still apprehensive about physical dealings. Even something simple as paying cash or handing over a credit card may cause some customers to doublethink these days. The faster the restaurants can implement digital payment methods and integrate them with the convenience of making reservations and placing orders online, the more secure these restaurants become.

2. New business models

2021 is already abuzz with catchphrases like curbside pickup and cloud kitchens. Virtual restaurants and brands that only exist digitally are also becoming more prominent. These integrated and innovative business models are redefining the US restaurant industry. Amid the devastating impact of 2020, these new ways of placing and delivering orders offered a lifeline-of-sorts to the dying industry. In 2021, we will see these models become even more digitally integrated, and possibly contest the more traditional wine and dine models of the pre-Covid era.

3. Third-party partnerships

Be they high-end fine dining restaurants or street stalls, the food business has always relied on being at a certain physical location to provide their services. The post-Covid era calls for a change in that structure – outsourcing. Restaurants will increasingly partner with food delivery platforms and other digital players to create an ecosystem where customers can order what they want when they want, and where they want it, at the click of their fingertips.

Sources predict that it may take as many as five years for the restaurant industry to make a complete recovery. As such the industry is facing tremendous pressure to evolve rapidly or perish. Modifying their traditions to better suit the demands of the modern world will prove instrumental in fighting further relapses. While it may seem that the dimming of orders may eventually dim their kitchen lights, by embracing innovation, restaurants operating in the new normal can improve their chances of surviving the paralyzing blow that COVID-19 has dealt.