Why Is a Recession Beneficial to the Restaurant Industry


Why Is a Recession Beneficial to the Restaurant Industry: According to the National Restaurant Association, finding and retaining employees has been among the top 10 issues in the restaurant industry over the last two decades.

However, during a recession, the restaurant industry is one of the most resilient.

With unemployment at 10%, the restaurant industry is attracting job applications that it did not previously see.

While many people see working in restaurants as a temporary solution until something “better” comes along, many others choose to stay in the industry and make it a permanent career.

During a recession, the restaurant industry benefits from more plentiful and high-quality labour, making this an excellent time to hire new personnel.

recession and the restaurant industry

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Rent reductions

Commercial property rents in many places have risen past what the market can bear, just as residential property prices have.

We are seeing clients successfully renegotiating leases in the United States and abroad.

A restaurant’s ideal “occupancy cost” (rent, C.A.M., etc.) is 8-10% of sales. If your sales have fallen dramatically or you are paying above the appropriate range, now is the time to negotiate a rent reduction.


During recessions, previously inaccessible or unaffordable locations become accessible. One client has been eyeing a house for nearly 20 years but has never been able to close the deal.

He received the best location and a better deal on rent and leased terms than he could have in any other situation.

While many restaurants are forced to close, others leverage their extra wealth to expand.

For individuals with capital, the best time to expand is usually near the recession’s end.


When encountering a stumbling barrier, we must see how far we can push our abilities.

During a downturn, we scrutinise the income statement more closely, implement more efficient procedures, and seek inventive ways to thrive in the face of adversity.

People are generally driven by a desire to avoid suffering and acquire pleasure. When we are in pain, we move with increased urgency and purpose.

Successful restaurateurs innovate whenever our economy is in a slump. They sway like willow branches.

“Those who can best evolve, not those who are fittest,” Darwin said.

Making more intelligent shopping a requirement

When times are tough, we all make different purchases. When there is a lot of money, it is simple to overestimate and misallocate it. Scarcity raises the price of resources.

During a recession, buyers can get better deals from suppliers who need to sell inventory and service providers seeking to fully use their best employees.

A recession not only allows them to find better deals but also provides an after-school opportunity to remain disciplined and diligent while making purchasing decisions.

This is the time to evaluate inventory levels, menu yield and usage and implement technology to increase efficiency, among other things.

In a normal restaurant, 95% of revenue is spent on suppliers and vendors, leaving only 5% for the owner.

As a result, it is unavoidable to improve procurement and the supply chain.

Take care, though, to only cut a small amount.


As insensitive as it may look to some, our industry requires recessions to keep everyone on their toes and identify the weakest links.

Pruning a rose bush maintains its health by eliminating specific branches, flowers, and shoots. Forest fires are vital for a forest’s health.

Forest fires appear to be dreadful, and there is undoubtedly collateral harm, but they serve a greater good, and this natural occurrence is part of the necessary cycle.

As an industry, we need recessions like a forest needs a brush fire. As an industry, we are progressing.

Take your time when it comes to marketing.

You must be more vocal than ever when demand dips. Cutting your marketing budget during a recession is a bad decision. If you remain silent, you will go unnoticed.
Rethink the menu.

You could think about updating your menu if you have some spare time. Create something original that meets current diners’ expectations, and be mindful of allergens.

Keep track of your overhead costs. What are you overpaying for regarding services, systems, and products? Reduce when appropriate.

Do the little things.

Invest in energy-efficient light bulbs and appliances, and stop tossing out perfectly edible food.

Keep an eye on payroll (but don’t get too carried away). Alternatives to layoffs exist for cutting payroll. For example, if you can reduce the number of servers on slow evenings or consolidate duties, you can save money without causing too much disruption to staff.

And, as heartbreaking as it may be for those who fail, they, too, learn, grow, and frequently return better than before. Edison failed 20,000 times before inventing the light bulb, as my father used to say.

Even though it doesn’t appear to be the case right now, every cloud has a silver lining. All you have to do is look for it.

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