Small restaurants may be facing a difficult road ahead, but far from keeping their heads down and doing the bare minimum to make ends meet each day, many remain willing to invest in innovations, forging their way toward a brighter future.
Main Street’s hospitality businesses are more likely than any other kind of establishment to be looking to upgrade, according to research from the January issue of The Main Street Merchant Index™ (MSI), “Main Street Index: Optimism Amid Inflation Edition,” a PYMNTS and Melio collaboration, which draws from a survey of 765 business owners on Main Street U.S.A. conducted in the late fall.
Get the study: The Main Street Index
Specifically, 55% of food, entertainment and accommodation firms reported that they are “very” or “extremely” likely to invest in equipment purchases or upgrades in the next six months. That figure puts these businesses above other categories and comfortably above the overall 51% of Main Street businesses that say the same.
This focus on innovation comes even though restaurants are struggling financially, relative to other businesses. Only 47% of food, entertainment and accommodation businesses reported that they expect higher revenue in 2022 than in 2021, well below the 64% of businesses across industries predicting the same.
Much of this innovation will likely take the shape of adopting new digital payment tools. The Index found that, of front-office capabilities that Main Street businesses plan to invest in in the next year, the option to pay with QR codes was the No. 1 pick, shortly followed by the ability to pay with digital wallets, with the addition of rewards programs coming in third.
Notably, businesses’ priorities here differ from consumers’, as is revealed by data from this month’s edition of the Digital Divide Report, “Digital Divide: Minding The Loyalty Gap,” a PYMNTS and Paytronix collaboration, which featured a survey of more than 2,400 U.S. adults about their restaurant habits. The study found that loyalty programs are far and away the top feature that consumers say would encourage them to make restaurant purchases, with digital wallet and QR code payments trailing far behind.
Read the report: Minding The Loyalty Gap
In addition to adding new consumer-facing technologies, restaurants are likely looking to upgrade their kitchens, given that back-of-house equipment gets smarter every day. On the leading edge of this innovation are the automated devices emerging to take the labor out of simple food preparation and production tasks, a vital function as labor challenges continue to weigh heavy on the industry. By taking a chance on these new technologies, small independents would be taking a tip from category giants.
“There hasn’t been a lot of talk about this because it’s not as guest-facing, but enabling kitchen operations with more digital, allowing for more dynamic kitchens … those kinds of things will be a trend in the restaurant space as folks move out of just that pre-order and fulfillment function,” Steph So, head of Digital Experience at Shake Shack, told PYMNTS in an interview. “Digital’s going to expand into other spokes of the wheel.”
Read more: Shake Shack Sees Digital Experience Driven by Dynamic Kitchens
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