The restaurant industry has suffered greatly over the past few years, especially due to ongoing labor shortages and general inflation.
In fact, recent reports from the National Restaurant Association reveal that over the past few years, food costs of the average restaurant have increased by 29%. To make matters worse, labor costs have increased by around 31%, leaving little headroom for restaurant owners and operators to work with.
Owners must also contend with higher expenses, including energy bills, maintenance and upkeep, and more, while struggling to hire and retain dependable staff.
With so much external pressure, it’s becoming increasingly difficult to turn a profit running a restaurant, which is putting many food and beverage business owners at risk.
In order to adapt, many are turning to the ever-growing restaurant technology industry, trying to find tools to help them streamline their operations, reduce overhead, and fill staffing gaps.
What Inflation and Labor Gaps Mean for Restaurant Survival
Inflation and labor shortage issues have placed the most pressure on restaurant owners, who are now having to find ways to adapt.
The Impact of Inflation on Food Prices and Restaurant Operations
Inflation has driven up the cost of food for everyone, and while it’s set to slow down in 2025, it’s still putting pressure on restaurants that must pay higher prices for raw ingredients. Key items like meat, dairy, produce, and grain are at all-time highs.
Operational expenses are also on the rise. The price of rent and utilities, not to mention ongoing maintenance, has also surged, making it harder and harder for restaurants to stay profitable. With shrinking profit margins and sales, owners are now having to look for ways to cut expenses, which can negatively impact the integrity of the business.
As the cherry on top, supply chain disruptions have become another significant hurdle, many of which stemmed from the pandemic in 2020. With product delivery delays, ingredient shortages, and increased shipping costs, the strain on restaurant owners is greater than ever.
The Current Shortage of Restaurant Workers
The labor shortage in the restaurant industry has proven just as damaging as rising food costs.
Even as people return to dining out post-COVID, restaurants struggle to find enough staff to keep up with demand. High turnover rates continue to plague the industry, making it harder for restaurants to build reliable teams.
This lack of consistent staffing is also significantly impacting the customer experience. Long wait times, understaffed dining rooms, and slower service are becoming more common.
To cope, many restaurant owners make adjustments wherever possible, offering higher wages, increasing employee benefits, and even focusing on better training programs to improve retention.
Despite these efforts, the struggle to find and keep reliable workers continues.
This is where restaurant technology can provide a much-needed solution.
How the Restech Industry is Combatting Inflation
POS Systems With AI Integration
Point of Sale systems have advanced significantly over the past decade. Many of them utilize AI integration and offer a range of capabilities that help restaurants reduce costs, streamline operations, and improve customer service.
AI-powered POS systems can automatically track and analyze sales data, providing valuable insights into customer preferences and purchase patterns. They can also optimize inventory management by forecasting demand more accurately.
Automated Payroll for Restaurants
Labor costs are one of the most significant expenses for any restaurant, and with staffing shortages pushing wages higher, managing payroll has become increasingly complicated.
Automated payroll solutions, like those from Gusto, are designed specifically for the restaurant industry to alleviate these complications.
Automated payroll systems can calculate wages, taxes, and benefits with greater accuracy and less human intervention, reducing the risk of costly errors. These systems also streamline employee management by providing detailed reports on staffing needs, helping managers make data-driven decisions about hiring, training, and scheduling.
Restaurant accounting software has become essential for many major restaurants trying to stay afloat in this volatile economic environment.
This software is designed to handle restaurants’ unique financial needs, helping owners track expenses, manage cash flow, and prepare for tax season.
With rising food prices, supply chain disruptions, and increased operational costs, having an accurate financial overview provides a unified view of all financial data so that owners can spot trends, identify areas for cost reduction, and make informed decisions about where to invest or cut back.
How the Restech Industry is Addressing Labor Shortages
Scheduling & Shift Management Software
One of the biggest challenges restaurants face with labor shortages is managing schedules and making sure the right number of staff are available at peak times. Scheduling can be complex, especially with high turnover rates, fluctuating demand, and the need to balance labor costs.
With scheduling and shift management software, however, restaurant owners and managers can automate the scheduling process using historical data to predict busy periods and refrain from overstaffing.
Self-Service Kiosks & Online Ordering
Self-service kiosks help automate the ordering process, freeing up employees to focus on other tasks, such as food prep and customer service.
Self-service kiosks, which are often placed in quick-service establishments, allow customers to browse the menu, customize their orders, and pay, all without assistance from a cashier or server.
Online ordering systems have seen a dramatic rise in use. Since 2021, the use has increased by around 150%. Customers can place orders from the comfort of their homes or while on the go, reducing the need for in-house staff to handle every transaction.
A Bright Future for Restech
The restaurant industry is undeniably facing immense pressure right now. However, with the growing adoption of restaurant technology, owners and operators are finding innovative ways to thrive in an increasingly challenging economic environment.
As we move forward, technologies like AI-integrated POS systems, automated payroll, and advanced scheduling tools will continue to reshape the way restaurants operate. With our deep industry expertise, strategic growth resources, and partnerships, we can help you identify and implement the right solutions for your business.
What’s next for your restaurant in 2025? Reach out to us today to explore how our network, mentorship, and industry insights can empower your business to excel in the current state of the industry.
