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Updated: September 1, 2021

Restaurant industry starts to rebuild amid challenges, new barometer shows

Bangor outdoor dining Photo / Renee Cordes A new survey by the National Restaurant Association found that 84% of adults favor allowing restaurants to set up tables on sidewalks, parking lots or streets permanently. This was a lunchtime scene recently in downtown Bangor.

Restaurants nationwide that have struggled during the pandemic are slowly starting to get back on their feet but face challenges ahead, according to a new report from the industry's leading trade group. The report warned that uncertainty and waning consumer confidence could affect long-term rebuilding.

The National Restaurant Association, a Washington, D.C.-based group that represents a million restaurant and food service businesses with a combined workforce of 15.6 million employees, released its findings on Monday.

Researchers found that food and beverage sales in the restaurant and food service industry are projected to reach $789 billion in 2021, up 19.7% from 2020, along with a steady trend of job creation in the first half of this year.

But labor shortages continue to be a problem, with jobs at eating and drinking places still nearly a million jobs, or 8%, below pre-pandemic employment levels and the restaurant and accommodations sector with one of the highest levels of unfilled job openings of any industry. 

The report also warned that the delta variant of COVID-19 threatens to reverse the gains made in the first six months of the year, with 19% of adults saying they have stopped going to restaurants completely.

But dining habits are evolving, with 37% of people surveyed saying they are ordering delivery or takeout instead of eating out and 84% favoring restaurant tables permanently on sidewalks, parking lots or streets, the report found.

"The trends of the first half of the year are promising, but a lot of uncertainty remains in regard to the delta variant, consumer confidence and ongoing labor challenges," said Hudson Riehle, senior vice president of research for the National Restaurant Association. "We expect restaurant pent-up demand will remain high in the combing months. However, in the state of flux, maintaining the availability of on-site dining with few capacity restaurants will be critical to keeping the overall sales momentum going forward, especially for full-service operators.”

Also a mixed picture in Maine

In Maine, new data from HospitalityMaine shows that taxable revenue at Maine restaurants was up 7.8% in June 2021 over June 2019, while the number was up 27% for lodging.

Matt Lewis, president and CEO of HospitalityMaine, told Mainebiz that while there are some positives to take out of the national report, workforce issues will continue to be a hurdle for hospitality businesses in Maine and elsewhere.

"Maine is not the only state with a struggling workforce," he said by phone Tuesday. "It's happening everywhere, and we will likely be having these conversations for years to come, even if you continue with the upward trajectory of getting out of COVID."

He also said that in spite of staffing shortages, many Maine hospitality businesses are reporting a busy season, "and it's expected to not just end at the end of the summer."

As for the 19% of adults who have stopped going out to restaurants as shown in the national report, Lewis says they should be encouraged to support local businesses by placing take-out orders.

He also said that HospitalityMaine is pleased with its "Great Maine Comeback" campaign to lure former hospitality workers back to the industry as measured by the number of video views online.

"From an impressions point of view we were very pleased," he said. "The overall image enhancement it [the campaign] gave the industry has been really good. That is a message we are continuing for the rest of the year and moving forward. We're very proud of the hospitality industry and how resilient they've been."

Find the full "2021 Mid-Year State of the Restaurant Industry Update" here.

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