Dive Brief:
- A majority of restaurant operators (88%) have a neutral or positive outlook for 2023, according to a survey of 1,000 restaurants conducted by Rewards Network this summer.
- While half of operators are concerned labor shortages are hurting operations, only about 4% of customers have cut back on frequency due to staffing issues, according to a press release emailed to Restaurant Dive.
- Despite inflation concerns, operators have faith in customer loyalty, with 54% of restaurants expecting frequency to reach or surpass pre-pandemic levels.
Dive Insight:
Rewards Network’s survey shows a degree of optimism from operators that runs counter to prevailing narratives of an impending recession and continued labor shortage. Studies earlier in the summer indicated one-third of operators had frozen hiring in preparation for a generalized downturn. Fears of a recession and macroeconomic headwinds may be contributing to turnover at the C-suite level this year, too.
While surveyed restaurants expected about 20% of diners to cut spending as a result of inflation — 91% of surveyed restaurants increased prices this year — operators mostly expect this to translate into a desire for greater value. Some chains have taken to emphasizing value offerings this year as lower-income spending shrank in recent quarters. Del Taco, for example, launched its “20 Under $2” menu in January.
Loyalty and rewards programs have emerged as a key method of retaining customers and improving business. Nearly three-quarters (73%) of restaurants with loyalty programs surveyed by Rewards Network said loyalty programs would be important or critical to remaining in business post-pandemic. About 54% of restaurants without such programs shared those sentiments, according the release.
“Rewards programs writ large are giving people reason to continue spending on hospitality,” James Roedding, chief product and marketing officer for Rewards Network, said in a statement.
More companies, including smaller chains, are changing or adding loyalty programs this year as restaurants struggle to maintain diner frequency. Xperience Restaurant Group, a company operating several Mexican brands, added a loyalty program at 57 locations earlier this year. Rubio’s Coastal Grill, a mid-size fast casual chain, revamped its loyalty program in late August to allow customers to earn rewards predictably.
Some recent partnerships have sought to extend the value of loyalty programs past restaurant rewards. BurgerFi and Anthony’s Coal Fired Pizza & Wings teamed up with Visa to offer 1% cash back on purchases outside their restaurants made with co-branded Visa cards.
