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Restaurants create 61,000 jobs in March

Restaurants added 61,000 employees in March, according to the Bureau of Labor Statistics, but are still well below pre-pandemic numbers.

During the month, food services and drinking places employed about 11.54 million workers, about 750,000 fewer than in February 2020. Employment in leisure and hospitality overall fell by 1.5 million, or 8.7%, since pre-COVID.

In February, 863,000 people quit their jobs in leisure and hospitality, representing about 21% of the private sector. It was the most since November, when 881,000 people left their jobs. There were also 1.7 million job openings in February, more than in October, November and January, but less than the 1.97 million openings in December.

Restaurant workforces were hit hard by Omicron’s ramp-up in December and January.

For example, El Pollo Loco’s fourth-quarter same-store sales were hit 5-6 percentage points by labor issues, resulting in an increase of just 0.3% on a two-month basis. years. But conditions have improved greatly since then; CEO Larry Roberts said in mid-March that Omicron’s impact had become negligible. He also noted that the flow of applications is increasing, turnover is decreasing and only a small part of the stores have reduced their opening hours.

Pollo Tropical’s restaurant-level adjusted EBITDA margin was 14.3% in 2021, compared to 21.8% in 2020 and 19.2% in 2019. Chief Financial Officer Dick Montgomery attributed the decline to salary increases schedule, short-term hiring incentives, and overtime and training ahead of schedule. pricing action.

A number of brands have turned to operational innovation to alleviate labor issues. Chipotle recently revealed that it was testing a robot capable of making tortillas, similar to the frying machine deployed in several White Castle kitchens. In the world of pizza, Papa Johns is developing Papa Call, a center that handles phone calls for restaurant workers, Marco’s Pizza is testing a voice-to-text ordering system in 50 restaurants, and Domino’s is getting rid of unnecessary tasks to improve productivity, such as pre-folded cartons.

Zhong Xu, co-founder and CEO of online ordering integration company Deliverect, says that even as restaurants approach pre-pandemic levels, high levels of turnover will continue to challenge operations and efficiency. . Hence, why automation is gaining momentum.

“The digitization of restaurants, accelerated by the confinement, continues to grow,” he says. “If restaurateurs want to succeed in a competitive environment, they must evaluate their operations and adopt tools and technologies to help them become future-proof.”

“Technology allows the industry to expand its reach and provides a continuous revenue stream,” Xu adds. “With an ever-changing external landscape, business owners need to build a solution-based strategy to help their restaurants digitize, streamline and manage their sales processes in order to thrive in the online space and help effectively manage and develop their business.”

Xu calls food automation “one of the biggest trends we’ve seen this year.”

“The restaurant industry envisions an innovative future with the use of emerging technologies to manage labor costs and this will only continue to help operators reduce costs and improve the work-work balance. personal lives of restaurant workers,” he said. “Additionally, by automating the online ordering process, restaurants can eliminate human error and free up staff time so they can focus on improving the customer experience.”

Other restaurants are rolling out streamlined prototypes that rely heavily on digital, like Popeyes’ upgraded unit on Canal Street in New Orleans. The store features self-service ordering kiosks, order picking boards, and dedicated areas for picking up digital orders.

“It will be the future in terms of delivering Popeyes to our customers. It won’t all be digital formats. It won’t all be ghost kitchens. It will be a balance of everything,” said the brand’s president, Sami. Siddiqui said RSQ.

Rising labor costs, along with commodity pressures, have forced brands to repeatedly raise menu prices. The index for food eaten outside the home rose 6.8% in February year-over-year, the largest 12-month increase since December 1981. Limited-service meals increased increased by 8% over one year. “Restaurants should be looking at where they can cut costs, whether that’s optimizing menu items or automating tasks where they can, to ensure the bottom line stays afloat,” says Xu. “The ultimate goal is to save money without sacrificing a high standard of service. »

“Restaurants need to leverage technology to make their workforce more efficient,” he continues. “Staff shouldn’t get bogged down in monotonous tasks like manually copying online orders and sending them to the kitchen, but rather focus on providing excellent customer service.”

The US unemployment rate fell 0.2 percentage points to 3.6% in March. The number of unemployed fell from 318,000 to 6 million.

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