5 years since COVID: Here’s how the restaurant industry has changed for businesses, consumers
It is hard to believe that it’s now been five years since COVID hit the United States.
As consumers, we have seen a lot of changes in the restaurant industry. I would like to take this opportunity to help you, the consumer, understand what all restaurants have gone through in the past five years and get a better grasp on how it has affected you.
During COVID, inconsistent government programs forced restaurants to close or put them in a position to only allow 25% of the business to be open while paying 100% of rent. If you have favorite restaurants who survived COVID, you should take a minute to congratulate the owners. In Illinois alone, 21,700 (20%) of our restaurants did not survive.
The goal of today’s article is to give you some insight into why menu prices have jumped higher than any of us can remember, as well as look at the changes that have taken place over the past five years.
Labor dollars and the cost of food
Since 2019 labor is still hard to find but not as impossible as it was 2 1/2 years ago. At that point, restaurants were seeing how robots and other technology could fill those positions.
Now in 2025 I am finding it easier to fill server, busser and cook positions, but the turnover rate is still high. According to recent YOY data from the U.S. Bureau of Labor Statistics, the national average employee turnover rate across all industries is 3.6%, and nearly double that in the restaurant industry.
Labor cost/minimum wage has skyrocketed in the past five years. Since 2019 wages in Illinois have gone up as much as 45%. A restaurant that had a payroll of $200,000 in 2019 now is paying $300,000. Of course, restaurants must raise prices just to keep their employees.
I think it’s easiest for all of us to understand how food prices have shot up when we consider that fast food has gone up more than 60% in the past five years. In 2019, fries at McDonald’s were $1.79 and now they are $4.19, and the Big Mac has jumped from $3.99 to $7.49. Taco Bell prices have increased as well. The 5-Layer Burrito, once $1.69, is now $3.69. Now consider the full-service restaurants that were paying $40 for a box of chicken wings and seeing the price jump to $150 per case. A wing may have once cost the restaurant $0.50; that same wing today can cost as much as $1.50.
Good news for staff
I have been in the industry for a long time, and I always felt the hourly staff should have more benefits than the industry offered. Management was offered health care, vacation time and other benefits that other industries offered.
COVID has forced the hospitality industry to rethink how we treat our entire team. Since 2019, most restaurants are offering more flexible time for management as well as shorter hours. Hourly employees are getting more vacation time as well as schedules that fit their lifestyle. While many companies still don’t offer health insurance, I have a number of my hospitality clients offering health care such as Teledoc and other online tele-medical services. These changes were long overdue, and COVID drove us in that direction.
What’s next
The supply chain is back in order, although the price of restaurant equipment also has gone up significantly in the past five years. As I write this article, the egg shortage is taking its toll on everyone. Waffle House has put a $0.50 up-charge on every egg they serve, and I think a lot of restaurants will be doing something similar in the very near future.
The good news is that stability in the past 18 months has given restaurant owners a little breathing room to look closely at their costs, their prices and put more focus on offering greater value for the guest.
• Izzy Kharasch is the founder of Hospitality Works, a consulting firm that has worked with 700+ restaurants and small businesses nationwide. He is offering Daily Herald restaurant owners a free consultation by contacting him at Izzy@HospitalityWorks.com.