2021 was a more difficult year for full-service restaurants as a prolonged lockdown during the second half of the year, particularly in Auckland, strongly hit category demand. This was aggravated by the absence of tourists in the country and the work from home trend.
The full-service restaurants industry suffered from a labour shortage in 2021 due to a lack of inbound foreign workers and a significant number of experienced staff members transferring out of the industry during 2020. As such, operators had to offer higher wages to attract staff, which added to their rising costs.
Although cities other than Auckland enjoyed considerably less stringent restrictions in 2021, they still relied on domestic tourism from the capital. Aggravated by rising fixed operational costs, flexible ideas were proposed to ease restrictions on the hospitality sector.
With restrictions still in place, albeit likely to ease in New Zealand over the next couple of years, dining outdoors or ordering meals for takeaway and home delivery will remain the norm. Restaurants in Auckland and other major cities have already capitalised on this trend with innovative dining ideas, instigated both by City Councils and individual full-service restaurant players.
Dine-in restaurants rely heavily on human interaction; however, this is likely to significantly change in the post-COVID-19 landscape. As businesses are likely to try to restrict operating costs to make up for the losses endured during the last couple of years, it is anticipated that investing in automation and contactless technology will gain momentum.
COVID-19 has also brought about changes in consumers’ dining habits with the trends of greater at-home-consumption and convenience combining to drive demand for prepared meals or meal kits. Although this trend may damage sales for many full-service restaurants, several category players are buying into this business model and offering prepared meals or meal kits for contactless delivery or pick-up or even boxes.
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FSR (full-service restaurants) encompasses all sit-down establishments where the focus is on food rather than on drink. FSR is characterized by table service and a relatively higher quality of food compared to quick-service units. Menus offer multiple selections and may include breakfast, lunch and dinner. Preparation of food products is often complex and involves multiple steps. NOTE: restaurants types catalogued in this segment refer to table-service only (outlets with a proper “full table service:” wait staff attending customers and taking orders at the tables). Outlets with “limited table service” are excluded from FSR. For example: outlets where customers order their food at the counter are excluded (even though the waiter will then bring the food at the table).See All of Our Definitions
This report originates from Passport, our Full-Service Restaurants research and analysis database.
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