Despite ongoing challenges presented by COVID-19, the restaurant sector feels more confident going into the new year with a new study revealing that confidence level in the sector has jumped to +42 from a +9 back in August 2020.
According to the latest Deliveroo HospoVitality Index Report, 55 per cent of all restaurant owners surveyed said they felt positive about their own business prospects, with only 13 per cent feeling negative.
Restaurants are, nevertheless, aware of the challenges that lie ahead, with concerns for the state of the national economy (57 per cent), produce prices (53 per cent) and lower consumer spending (47 per cent) being the most pressing concerns in the sector.
The report surveyed more than 300 restaurant owners across Australia, with the help of YouGov, to understand business confidence, industry challenges, how they’ve responded to the COVID-19 pandemic and their growth plans for the future, with a particular focus on workforce structure and expansion plans.
It further revealed workforce structure will be critical to success in 2021, with 81 per cent of restaurant owners saying they plan to hire more staff in the year ahead, indicating early signs of a comeback for the sector. Of those, 59 per cent intend to hire casual staff while 40 per cent said they will hire both full- or part-time permanent staff. Government support is still important, with two thirds (66 per cent) planning to employ at least one additional staff member using the new JobMaker scheme.
The sector was impacted by many valuable migrant workers being forced to return home when international borders closed. In response to this, 38 per cent of restaurants will look to build out their team with more staff on skilled or migrant visas. In addition, 43 per cent of restaurants plan to expand their business in the next 12 months. Smaller restaurants are more cautious, however, with only 33 per cent confident of expansion in 2021 and 51 per cent not expecting to grow.
For restaurants planning to invest in their business in 2021, the priority is for the 64 per cent is new equipment for the back of house area, followed by equipment for front of house (60 per cent) and sustainability initiatives (58 per cent), and 55 per cent are planning to renovate. 36 per cent intend to apply for a loan to fund their expansion and investment plans, while half of all restaurant owners don’t plan to seek finance at all.
“Last year, Australia’s restaurants demonstrated immense strength in the face of unprecedented upheaval,” Ed McManus, CEO of Deliveroo, said. “Last year’s survey saw a nervous sector but just six months later we are all pleased to see a more positive outlook emerge for the year ahead. This not only demonstrates the resilience and adaptability of owners across the industry, but also brings hope for a year of recovery for both the sector and the economy.
“Positive growth and investment plans for the workforce and expansion is an exciting development,” McManus added. “Nevertheless, with outbreaks still occurring at home and abroad, challenges remain and restaurants still require support. However, if the last six months are anything to go by, our restaurants are ready and we will no doubt continue to see some brilliant innovations emerge from the sector.”