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Technology

Restaurants’ tech investments shift to the back-of-house

Restaurants are shopping for tools that can help them be more efficient, given rising costs and labor challenges.
Taking inventory
Inventory management software is in demand for restaurants. / Photograph: Shutterstock

The top item on restaurants’ tech wish list this holiday season? Inventory management systems.

That’s according to a survey by the National Restaurant Association and accounting software provider Sage Intacct, which asked operators where they plan to spend their tech dollars over the next one to two years.

Their priorities are noticeably different now than they were just after the pandemic began, when restaurants rushed to invest in delivery apps and QR codes.

Source: National Restaurant Association and Sage Intacct

But times have changed. In 2020, restaurants needed ways to allow customers to order food safely, which often meant remotely. Now, the industry is facing different challenges, chiefly hiring and cost inflation. So they’re looking at tech that can help them run their restaurants more efficiently. 

Inventory management systems, for instance, can automate processes formerly done by hand and ensure that restaurants are purchasing the right amount of goods. That can help keep costs down.

“A lot of this is in the administrative and process area,” said Hudson Riehle, the Association’s SVP of research and knowledge, during a webinar Thursday. “This is really a long-term important development strategically, particularly in these higher-cost operating environments … to make the basic American restaurant experience much more efficient.”

Operators have struggled with hiring in particular coming out of the pandemic. Nearly 50% of operators surveyed by the Association in October said recruiting was their top challenge.

“The ability to apply technology against such a labor-intensive industry as the restaurant industry is very important, particularly with a labor crisis,” Riehle said.

At the same time, restaurants are still prioritizing the off-premise business: 18% said they plan to invest in ordering or delivery apps, according to the Association, as to-go continues to be a strong source of sales.

Indeed, the restaurant industry has become an overwhelmingly to-go affair. A whopping 77% of traffic in August was off-premise, according to data from the NPD Group and the Association, a combination of drive-thru (39%), carryout (29%) and delivery (8%). Off-premise traffic was 16 points higher that month compared to February 2020.

“Looking ahead in 2023, is that ratio ever going back to 61%? That is unlikely,” Riehle said. “Technology has played such a critical role in allowing consumers greater access to these off-premise ordering and businesses.”

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