Order up! Post-pandemic, restaurants are ready to serve
New Agency Forward survey examines how restaurants are managing risk amid inflation and a post-pandemic environment
Restaurants are making a comeback with reservations now exceeding pre-pandemic levels. Even while facing inflationary challenges, restaurant decision makers have a positive outlook on their business’ financial situation, according to a recent Agency Forward survey from insurance and financial services giant Nationwide. Data also shows that patrons have a largely positive outlook on their restaurant experiences today.
Restaurants have adapted to pandemic challenges, rebuilt consumer confidence around in-person dining
Increased concern during the height of COVID-19 forced the industry to reexamine standard business operations, and consumers feel positively about some of the changes made. To help navigate challenging times imposed by the pandemic, restaurant decision makers report:
- Improved cleaning practices (33%)
- Utilization of mobile ordering and payment devices (30%)
- Reduced operating hours (30%)
- Added or expanded food delivery/take-out services (26%)
- Utilization of paperless menus like QR codes (26%)
Some say they launched a virtual brand/restaurant (20%) or leased kitchen space for a virtual brand/ restaurant (19%) – likely to help meet shifts in consumer demand.
Diners are (generally) happy with restaurants
The survey revealed roughly 3 in 4 (77%) restaurant patrons rate their experiences at restaurants today as good or excellent. 67% feel restaurant cleanliness has improved since the pandemic and 94% are satisfied with this progress.
Diners also feel good about:
- Addition or expansion of loyalty programs /rewards (87%)
- Addition or expansion of food delivery / take-out services (81%)
- Use of mobile ordering / payment devices (72%)
Fires top of mind, but restaurants feel prepared
Restaurant decision makers say fires are among the biggest risks facing their business today (24%) – re-enforcing the importance of properly maintained fire suppression systems.
Fortunately, about three quarters of decision makers (74%) say their staff is completely prepared to manage emergency situations, including a fire or injury. High confidence levels are likely due to employee training, as nearly 9 in 10 (87%) have mandatory safety training for their staff.
Unexpected risks are emerging
New digital risks have developed in what’s traditionally thought of as a face-to-face industry:
- 1 in 4 restaurant decision makers report negative reviews among their biggest risk factors, which could be related to overall increased social media use.
- 17% now say reliance on technology is a primary risk factor facing their restaurant today, identifying a potential cyber vulnerability for both owners and patrons by opening new digital doors to bad actors.
“Cyberattacks pose a significant business risk, especially when our Agency Forward research shows 76% of consumers would stop doing business with the company responsible for a data breach that impacted them,” said Peter McMurtrie, president of Commercial Lines at Nationwide. “As restaurants increasingly rely on technology, cyber liability insurance becomes crucial for safeguarding sensitive customer data and avoiding costly breaches or reputation hits.”
Restaurants are feeling the economic pinch
More than 6 in 10 (62%) restaurant decision makers cite inflation and rising costs as well as difficulty acquiring food and supplies as challenges facing their business today. Of those struggling with inflation, roughly a quarter have increased prices (28%) or changed menu items (23%) and 22% changed portion sizes.
Owners report that fresh seafood and fruits & vegetables are not only the most difficult items for restaurant decision makers to acquire, but they have also experienced the largest price increases over the past six months.
Despite challenges, over 8 in 10 (82%) restaurant decision makers say they are doing better financially than expected. Nearly 3 in 4 (72%) report an increase in their restaurant’s revenue over the past six months, and more than 9 in 10 (93%) also anticipate revenue increases in the next six months.
“Made to order protection” is essential for navigating today’s challenging climate
More than three quarters (77%) work with an insurance agent to manage their insurance needs and they’re looking to them for guidance as 9 in 10 decision makers have or plan to contact their insurance agent in the next six months to discuss coverage. 42% say they plan to add another type of coverage to their policy or increase coverage/limits on existing policies (39%) within the next six months, while about 3 in 10 plan to decrease coverage/limits (32%) or remove a type of coverage (30%).
“The restaurant industry will continue to rapidly innovate to meet the needs and preferences of its customer base. As key decision makers reevaluate insurance coverage needs, it’s more important than ever to work with an agent and carrier with specialized expertise and resources to ensure your business and livelihood is adequately protected from longstanding and emerging risks,” said McMurtrie.
Learn more about restaurant insurance offerings here. For additional insights on this survey data, view the full report here.