Lightspeed Commerce Inc. has released its 2022 Global State of the Hospitality Industry report. The report surveyed 1,100 hospitality owners, managers, and operators as well as 7,000 consumers from the United States, Canada, Australia, UK, France, Germany, and the Netherlands. The report aims to get a pulse on challenges and trends across different regions, gather insight into customer experience and expectations, and identify how industry leaders around the globe are navigating today's challenges and trends.
Tech Trends
As restaurateurs around the world are grappling with high inflation rates, staff shortages, and overall economic uncertainty, technology seems to be a key tool in battling these macroeconomic conditions. The ability for hospitality operators to do more with less is essential, and many survey respondents credited a POS or restaurant management software for streamlining and automating tasks. In fact, 78% of multi-location operators in the U.S. adopted new technology (contactless payments, QR code ordering, etc.) and 67% did so specifically to streamline employee shifts in 2022. According to the report, 46% of U.S merchants adopted tech to automate tasks in 2022.
When asked what technology improved business the most this year, 12% of industry respondents said they adopted new technology to streamline shifts (new POS or management software), which is an increase of 7% compared to 2021.
21% of restaurant owners brought online ordering in-house to avoid third-party fees, with the report finding that online ordering technology has improved business more than any other tech adoption. The most widely adopted tools this year include new or expanded online ordering, contactless payments, QR code ordering, and new POS and restaurant management systems.
“Digital adoption has been an important lifeline for hospitality businesses, and it’s clear there are greater efficiencies to be realized with new technology,” said Peter Dougherty, GM of Hospitality at Lightspeed.
Top Challenges
The rising cost of food and supplies is among the top obstacles that hospitality businesses are facing, with 37% of restaurant owners surveyed indicating this as their biggest challenge. More than half (61%) of restaurateurs indicated they are raising menu prices to combate inflation. Multi-location businesses raised menu prices the most (89%), with bars and pubs a close second (75%).
Restaurants like Kotsu Ramen and Gyoza, in California, were hesitant to increase their prices, but ultimately decided it was a necessary change. According to Chief Concept Officer, Grant Macdonald, the move to increase pricing ended up being beneficial in many ways. “There’s a sense that guests are incredibly price sensitive, and we’ve been actually very nervous about being able to move our pricing up,” said Grant. “In some ways, inflation has given us the opportunity to finally make some price changes that were necessary and move into new price points that really needed to happen.”
In addition to raising prices, the majority of U.S. hospitality businesses have implemented tighter food costing and inventory practices to stay on top of rising costs.
While inflation appears to be the dominating issue, it was followed closely by hiring new staff (23%) and staff retention (11%). In fact, 43% percent of restaurateurs are operating with less staff, and 32% of the respondents in the U.S. have raised wages to retain and attract talent.
To save on costs and to help prevent staff burnout, many hospitality businesses have also restricted the number of hours or days they are open with the number of bars and pubs reducing hours the most (58%) and multi-location operators the least (11%).
Sustainability has also become an emerging consideration. Nearly half (47%) of hospitality owners surveyed by Lightspeed agree that implementing environmentally friendly initiatives will attract more customers. 56% of U.S. multi-unit restaurant operators have begun integrating more local, farm fresh foods into their menus as part of sustainability efforts, as well.
Tactics to Combat Current Challenges
Lightspeed surveyed 1,100 restaurateurs and 7,000 consumers globally with OnePoll in 2022 (from September to October 2022). Industry respondents noted the following tactics to combat current challenges:
- 57% of respondents agreed that new technology adoption over the past two years has been critical to their business’ survival.
- 42% of operators improved food costing and inventory practices to ensure they are spending correctly and wasting less.
- 60% of restaurateurs agreed that inventory data (stock levels, waste) are important to them and 40% said they have already adopted inventory practices to work more efficiently and to reduce food waste.
- To ramp up sustainability, 39% are offering more vegan options, whilst 37% are adopting a food waste policy.
A Shift in Industry Trends
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Overall, beverage (both alcohol and non-alcoholic) sales saw the biggest increase from 2021, due to the return of in-house dining. Other climbers like small plates, dessert, and breakfast have also increased in 2022.
- Thanks to the return of in-house dining, return restaurants seem to be growing their menu sizes after paring them down over the past two years.
- Inflation appears to be negatively impacting consumers' spending habits, forcing them to rethink and more tightly control their spending. However, U.S. consumers are least impacted by inflation with only 27% responding they cannot spend money at restaurants due to inflation.
- In 2023, most guests plan to patronize hospitality businesses at the same rate or higher, despite increased costs.
Menu Trends
In 2021, 23% of merchants globally surveyed by Lightspeed said they reduced the number of items on their menu as a way of streamlining food costs or to focus only on items that retained their quality during delivery. However, as dining restrictions were lifted across the country, restaurants have been growing back their menus.
- In 2022, Lightspeed observed that the median number of unique menu items grew from about 150 in January 2021 to over 200 in July 2022.
- Beverages, including wine, cocktails, coffee and nonalcoholic drinks, saw the highest growth in sales this year.
- Sandwiches and wraps resulted in the highest food sales in US restaurants.
To view the full report, click here.
Plan to Attend or Participate in Bar & Restaurant Expo, March 27-29, 2023
To learn about the latest trends, issues and hot topics, and to experience and taste the best products within the bar, restaurant and hospitality industry, plan to attend Bar & Restaurant Expo, March 27-29, 2023 in Las Vegas. Visit BarandRestaurantExpo.com.
To book your sponsorship or exhibit space at Bar & Restaurant Expo, contact:
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Tim Schultz (for companies H to Q) e: [email protected] p: 917-258-8589
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