F&B will be a key ingredient in 2022 retail performance
Consumers’ demand for F&B has begun to recover since the lows of the pandemic
- Keisha Virtue
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F&B begins its comeback
It’s now been two years since the influx of COVID-19 into the US and while the impact on retail, as a whole, was tremendous, perhaps no segment suffered more than restaurants. Dining inside wasn’t possible for months and then capacity limits continued to strain restaurants for more than a year in some locations. QSRs on the other hand were able to pivot towards no-contact options like drive-thru and curbside pickup.
During the height of the pandemic I lived in in a small town in south Georgia where cuisine options were limited to QSRs like Chick-Fil-A. While I love chicken nuggets and waffle fries, there are limits. Two years later, I live in the heart of Boca Raton – a dining and shopping mecca – where the variety and quantity of F&B seems endless: from healthy picks like sweetgreen and Aloha Poke to casual giants like California Pizza Kitchen to in-theater dining at iPic. South Florida, with its generous outdoor dining options and limited restrictions, is definitely a foodie’s refuge. The growth in seated diners from 2019 levels to year-to-date 2022 is considerably higher for Sunbelt markets like Miami and Las Vegas than for markets in the Northeast or West regions.
SunBelt market on-premise dining significantly higher than rest of US
Inflation-adjusted food spending climbs
It’s not just restaurant reservations that have improved. Consumer spending on food – adjusted for inflation – is 12.3% above February 2020 levels. Digging a little further into F&B sales performance by type, the story is more nuanced. 2021 sales for full-service restaurants are still down 10.5% from 2019 levels and for bars and taverns that decline jumps to 31.8%. Limited-service restaurants, on the other hand, saw sales grow 9.7% from 2019 levels. Evidently, QSRs remain popular with diners who have gotten accustomed to getting a quick bite. However, with geographical differences in dining, market by market sales performance is bound to be widely varied.
Consumer spending on food grows more than on overall services
QSR restaurant expansion heats up
As the Omicron wave wanes and sales rise, restaurants are expanding once again. The number of fast-food chains rose 6.9% in 2021, chain restaurants grew 6.9% and single-location restaurants jumped 7.5% (IBISWorld Industry Reports). QSRs like Chipotle and Jersey Mike’s are adding hundreds of restaurants in the next year. Fogo de Chao – a Brazilian experiential steakhouse concept – has also been one of the few full-service restaurants that have announced expansion plans. The restaurant plans to grow its footprint by 15% this year and have at least 300 restaurants by 2042.
QSR restaurants push to expand