FAST FACTS: THE DECLINE OF FAST FOOD JOINTs AFTER THE PANDEMIC

The recent coronavirus pandemic was a huge global shock to many economies and industries. One of the hardest hit sectors in America was the fast food industry. Global corporations and local businesses all had to scale back operations, figure out a way to deal with the lack of customers, and try to survive the effects of such a catastrophe. Not every restaurant made it through, and those who did have an arguably even tougher challenge of staying afloat in the post-pandemic era. There are many factors contributing to a harsh environment for restaurants these days, like inflation, supply chain issues, a tight labor market, and high cost of living.

Tacodeli, an Austin-based taco restaurant, is one such chain that’s been affected by the pandemic. The fast food industry stagnated and the beloved local taco joint was no exception.

Scott Grossfeld, a co-owner, said, “We slowed down the growth during COVID. But since then we’ve started redoubling our efforts. So, starting to get some more signed leases and continue to grow.”

Like many other restaurants,

Tacodeli has made it their top priority to grow and expand now that the industry has recovered from the pandemic. However, it isn’t that easy. There are many steps to take before expanding operations.

Many people had to leave their jobs during the pandemic,

“As we open new locations it’s really about recruiting, hiring, and training people. Those are the biggest challenges, particularly right now [in this] really tight labor market.” - Scott leading to a massive labor shortage and hiring crisis.

However, the labor industry is not the only problem for restaurants in the postpandemic era. Rising food prices are also a big factor in why so many restaurants are struggling. “It’s kind of like this perfect storm coming out of the pandemic, [with] disruptions to supply chains, the war in Ukraine, and all these droughts and flooding,” explained Jill Hobbs,

By Kieran Tower

a professor of agricultural economics. “So it’s certainly made for volatile food markets and increasing food prices for consumers.” Restaurants are having trouble purchasing the food they need to sell, which doesn’t make their job much easier. The agriculture sector is so unreliable that supply is not a given, especially with the natural weather events happening right now. “Agriculture is an entirely biological process, right? You plant the crops or you feed the animals, so you’re very much at the whim of the weather or excess heat, and there’s not much you can often do about that as a farmer. So I think those types of vulnerabilities are problematic.” explained Hobbs.

There are also many factors contributing to the current inflation, which is higher than it’s been in decades. “We’ve seen this big run up in food prices, and inflation in general, and there’s a bunch of things behind that. The relative mean inflation is around six or seven percent,” Hobbs said. “And the government pumped a whole bunch of money into the economy just to keep people employed and so forth. There’s lots of what we call liquidity, lots of money floating around in the economy, and that’s also contributing to inflation.”

Not only are there global struggles with the pandemic, inflation, and supply chains, the local side of things is also looking grim. Austin is notoriously becoming exponentially more expensive to live in than in the past. Restaurant workers are facing tough times as their wages stay low and their expenses rise. “It’s tough because [the restaurant] obviously needs to stay in business, but also pay everyone a fair wage as much as possible.” said Grossfeld. “And that becomes harder and harder in markets like Austin, where it’s hard for folks to live and work in the city, given how expensive Austin has become.” Fair wages are a tense subject for the food industry. The minimum wage has been the same for almost 15 years, while the value of money has been decreasing. Many restaurant owners try to take the high road and support their workers with a high salary, but too much of an increase will lead to economic troubles for the business.

Restaurant managers have the tricky task of balancing the welfare of their employees with keeping their business afloat. Not all can do it, and most startup restaurants these days unfortunately go out of business. One in three restaurants go out of business in their first year of operation. The industry is not forgiving, and current conditions make starting a successful restaurant a nearly impossible task. Hobbs said, “Those that find their niche are able to compete [and] survive, but then again, it’s sort of a sector that’s dealing with these rising food costs… It’s also a pretty hard industry to find good chefs. And it’s not an easy job.” The best way to survive as a restaurant business is to find your niche and be unique to set yourself apart from the competition. However, it can be very tough to find people who can work for you when you need highly skilled chefs and workers to fulfill your idea. There’s no clear cut path to success, which is another reason the restaurant sector is so tough to work in.

There are always many challenges to overcome in order to start a restaurant business. The industry is known for its difficulty compared to other lines of work. Especially after the global coronavirus pandemic, there have been factors like inflation, supply chain issues, high cost of living, and labor shortage that combine into a perfect storm to prevent restaurants from operating successfully.

McDonalds,oneofthemosticonicfastfoodchains.CourtesyofMcDonalds.

By Kieran Tower