Restaurant Industry Workforce Returns to Pre-Pandemic Levels

It took more than three years and 33 consecutive months of employment growth, but the restaurant industry’s job pool is finally back to pre-pandemic levels. “Eating and drinking” places added 60,700 jobs in September, according to data from the Bureau of Labor Statistics, pushing it nearly 30,000 spots above February 2020’s peak. 

To put into perspective the breadth of this journey, restaurants have filled north of 6 million joins since March 2020 lockdowns. 

September’s result was the strongest jobs increase since January as well. In Q3 2023, the sector added a net 100,400 jobs, a big jump from Q2’s 36,300. Inclusive of that mid-year slowdown, restaurant job growth eclipsed 100,000 in 10 of the last 11 quarters.

Bruce Grindy, the National Restaurant Association’s chief economist and VP, believes the workforce expansion has room yet to run. Job openings in the combined restaurants and accommodations sector topped 1 million on the last business day of August, per the BLS. While that was down considerably from record levels registered during much of the past two years, Grindy said, job openings were still elevated compared to pre-COVID readings.

In 2019, he pointed out, there were an average of 875,000 hospitality job openings each month. “Using this as a proxy for normal labor market conditions, it means there were still nearly 150,000 job openings above normal in August 2023,” Grindy wrote.

Employees are flooding back to a sector that registered total sales of $90.8 billion on a seasonally adjusted basis in August (the most recent month shared by the U.S. Census Bureau). That number was 0.3 percent higher than July’s downward revisited-sales volume of $90.5 billion.

August marked the sixth consecutive month of sales gains, with total restaurant spending rising 4 percent. In comparison, total sales in non-restaurant retail sectors climbed 1 percent over the last six months.

But adjusted for inflation, sales for restaurants were essentially flat. The 0.3 percent nominal gain was matched by a 0.3 percent increase in menu prices. 

After adjusting for menu price inflation, eating and drinking place sales rose 1.8 percent between August 2022 and August 2023. Although the trendline was modestly positive in recent months, August’s sales volume remained below January’s level in real terms.

It paints what’s become a common picture through recent months—sales lift via price versus guest counts. Recent data from Revenue Management Solutions showed quick-service traffic in particular was down 18.4 percent when measuring June 2023 to June 2019. Traffic consistently declined since January 2022, when it was only 15.5 percent lower than 2019. Overall, quick-service average check was reporting 40 percent higher than pre-COVID. 

Additionally, the quick-service segment’s dine-in business lost nearly half of overall traffic in the past two years. Across 2023, dine-in traffic slid an average of 47 percent. It closed Q2 at negative 43.6 percent versus 2019. Average check in the dining room is 36 percent higher, with net sales 25 percent lower.

Traffic at the drive-thru was down an average of 12 percent in 2023 compared to 2019, according to RMS. Yet net sales were up 25 percent. Takeout traffic was 36 percent lower on that three-year view, with 42 percent average check growth, and net sales down 10 percent.

From an anecdotal perspective, the Association’s survey data found 46 percent of adults said they were not going out to restaurants as often as they would like (polled in late August). That was on par with consumers’ reporting in surveyed fielded over the past year.

Meanwhile, 36 percent of adults said they were not ordering takeout or delivery from restaurants as often as they would like—also akin to recent polls.

To put it simply, pent-up demand remains tangible, but it’s now coupled with hesitation thanks to cost dynamics.

Pent-up demand showed higher among lower-income households, with 54 percent of consumers in households with income below $50,000 saying they would like to be going out to restaurants more frequently, per the Association. Yet more than one in three adults living in households with income above $100,000 also said they were not dining out at restaurants as often as they would like.

“Any amount of unfulfilled demand among higher-income households is a positive sign for restaurants, as this demographic group represents the majority of spending in the industry,” Grindy said. 

Based on BLS data, households with incomes of $200,000 or higher are responsible for 24 percent of the total spending on food away from home, while households with incomes between $100,000 and $199,999 account for 33 percent. 

Taken together, households with income above $100,000 are responsible for nearly 6 in 10 dollars spent in restaurants, Grindy said.