Trends Report: On-Premise Dining Sales Increased 70% in Q4

Toast, the all-in-one platform built for restaurants, released its first edition of its quarterly Restaurant Trends Report, providing visibility into the overall state of the restaurant industry through aggregated sales data from restaurants on the Toast platform, which has approximately 57,000 locations as of the end of 2021 in the U.S.

Throughout 2021, the operating environment remained challenging for restaurant operators, as they faced the dual challenges of shifting workforce dynamics and a sustained labor shortage alongside rising input prices due to supply chain disruption and accompanying inflation.

 39% of restaurants say using data to understand guest preferences and behavior is driving their next POS upgrade, according to HT's 2022 POS Software Trends report

However, with this backdrop, restaurant operators, employees and suppliers remained incredibly resilient. The following insights show how consumer dining habits have changed and how restaurant operators and employees have been adapting to these changes.

Dining rebounds and digital drives growth

• Total restaurant sales are up 41% year over year: The “post-vaccination” rebound for the restaurant industry has so far fueled restaurant growth. Restaurant sales as measured by gross merchandise volume (GMV) on the Toast platform on a same-store basis increased 41% from 2021 compared to 2020.
• Toast Restaurants rebound from and exceed pre-COVID sales levels: Restaurants on Toast have recovered, as evidenced by an average same store GMV increasing nearly 6% from Q4 2019 to Q4 2021.
• Dining out is back: Diners are once again enjoying their favorite meals at restaurants. On average, on-premise dining sales rebounded from the beginning of the pandemic and increased 70% in Q4 2021 from Q4 2020 and grew 55% in the full year of 2021 compared to 2020.
• Takeout and delivery are here to stay: The convenience of ordering out is not going anywhere – takeout and delivery sales increased 59% from Q4 2019 to Q4 2021 and remain elevated.
• Full service restaurants (FSR) outperform: Diners are ready to enjoy the full restaurant experience again. Full service restaurants (FSR) total sales grew 55% from Q4 2021 versus Q4 2020, while quick service restaurants (QSR) grew 30% over the same period.
• Regional sales growth strongest in the South from pre-pandemic levels: The South (+12%) saw the strongest sales growth when comparing Q4 2021 to Q4 2019, followed by the West (+5%), Midwest (+4%) and Northeast (+0.4%).
• All US Regions Saw Strong YoY Growth in 2021: All regions across the US saw strong year-over-year sales growth, with the Northeast (+56%), Midwest (+52%), West (+50%) and South (+36%) all up from Q4 2021 versus Q4 2020.
• Top performing cuisines: European, Middle Eastern and Breakfast cuisines saw the highest growth in sales. European cuisines grew by more than an average of 58% GMV growth in Q4 2021 compared to Q4 2020.
• Tips are up slightly across the country: There has not been a decline in tips for servers and staff. Nationwide, tipping was up to an average of 19% in Q4 2021, an almost 1% increase from Q4 2020.
• Increased Employee Productivity with Technology: Labor shortages continue to be a challenge in the restaurant industry, but with the help of technology restaurants are seeing hopes to improve employee productivity. The typical restaurant on the Toast platform processed 4.5% more transactions per employee hour worked when comparing Q4 2021 to Q4 2020. Employees are able to be more productive with mobile ordering at the table and handheld point-of-sale, while guests get their food faster.
• Renovations and new equipment are among the top three needs for financing: Many restaurants utilized new capital for short term cash flow, day-to-day operations, and renovations made up for 28%, 20%, and 17% of financing needs respectively in 2021, showcasing restaurants are continuing to grow and innovate in these unprecedented times.