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SWOT Analysis for the Restaurant Industry

Check out this SWOT analysis of the restaurant industry to learn more about the key strengths and weaknesses paving the future for brands.

SWOT Analysis for the Restaurant Industry

The restaurant industry has endured everything from natural disasters, political unrest, and most recently, a global pandemic. We’ve witnessed incredible resiliency from restaurant brands, especially over the last 18 months, with accelerated innovation and adaptability. Weaknesses are still ever-present, but there are considerable strengths in our favor. By taking advantage of numerous opportunities, the restaurant industry is well-positioned to tackle the threats it is facing head-on and come out on top.


  • Sales recovery from the pandemic remains solid for restaurants, with multiple consecutive months of positive comp sales on a 2-year basis. Much of this is driven by check growth.
  • Tech innovation has dominated the last year or so. While a lot of this was accelerated by having to adapt and serve during the pandemic, much of this digital transformation was already underway as restaurants sought to provide a more frictionless experience for guests.
  • Demand is high from consumers, after months of remaining predominantly home-bound. Restaurants are still extremely relevant, whether it is by providing off-premise meals or a full dine-in experience.


  • Traffic has been a pain point for the industry for quite some time, even before COVID-19. It remains an issue today. Even with sales growth, restaurants have had a hard time getting traffic in the door.
  • Staffing is a persistent challenge for restaurants, even while the US labor market continues to strengthen. The story for most restaurant operators – it is increasingly difficult to find and keep staff – is the same. For more workforce trends, check out Black Box Workforce Intelligence™.
  • Competition with C-stores and online grocery has only been further cemented by changing consumer expectations. Guests need to feel their need for convenience and a seamless experience are met.


  • Labor will remain a threat to the industry until we can get our hands around it. Many restaurants are struggling to remain open due to a lack of staff. That is money out the door and wasted space for restaurants if they are unable to keep up with volume.
  • Lack of product availability is an issue across the board as consumers race to come back to restaurants. Operators are struggling with keeping basic items on their menus which makes it nearly impossible to maintain consistency with offerings.
  • Employee burnout can have a massive impact on overall results and more importantly, the health and wellness of your staff. Staff that have been employed during the crisis have been dealing with increased volume and customer service issues. Divisiveness over wearing masks, political positions, or social issues has made its way into restaurants as well, and employees are left having to deal with all of it.


  • Restaurants can capitalize on the growth of off-premise by creating virtual or ghost kitchen concepts. Brands that don’t necessarily want to run other concepts but have extra space could consider operating as a host kitchen and lease part of their facilities to other brands.
  • We need to adapt to the modern workforce and workers. This includes legislative action that is occurring at the local level and impacts wages, schedules, and paid leave. The staffing model was broken before the pandemic. The issues we are facing now should be the catalyst to finally fix the broken model. A good start is to make sure your employment brand message is on point and attracting the right people.
  • Robotics and automation will streamline efficiencies and help ease the consequences of the staffing crisis. Smart kitchen technology can help make the lives of existing staff easier and fill in gaps when adequate staffing is not an option.

FAQ’s about SWOT Analysis for Restaurants

How do you do a market analysis for a restaurant?

Start with an understanding of broad industry trends, then drill down into local markets. Figure out who your main competitors are and learn their strengths and weaknesses. Conducting a SWOT analysis for your restaurant and the industry will give you a high-level view of where your opportunities are.

What are restaurant industry trends?

Significant investments in technology have pushed the restaurant industry into a new era of innovation. The focus is on providing a frictionless experience for guests, an expectation that has become the norm. Download a free guide for restaurants, 14 Things to Watch in 2021.

What is the restaurant industry forecast for 2021?

Sales have recovered from the pandemic, but traffic still has a lot of ground to cover. The restaurant industry will be hyper-focused on finding and retaining qualified staff.

What are the strengths of restaurants?

Pent-up demand from consumers is driving restaurant sales higher than pre-pandemic levels. Digital innovation will help streamline efficiencies for restaurant operators and could help ease some consequences of the staffing crisis.

What are the weaknesses of a food business?

This SWOT analysis for restaurants indicates staffing and traffic as some of the major weaknesses. As consumers have shifted toward more off-premise dining, it has been more challenging to get people in the door for dine-in.

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