Small Restaurants Shift From Competing to Collaborating Amid Industry-Wide Challenges


As restaurants face ongoing challenges, many are beginning to work together to pull through.

Going from the lockdowns and other COVID-related challenges of 2020 and 2021 right into the current period of economic headwinds, small and medium-sized businesses (SMBs) in the industry are realizing that there is strength in numbers.

“It’s really a brutal time to be in our business. We faced a double whammy of crucible moments for a lot of us,” Jeremy Jones, chief vision officer and co-founder at Chicago vegan restaurant Uncooked, reflected in an interview with PYMNTS. “A lot of the things that we’re talking about [with each other are], ‘What are some things [that] have helped you weather this? [We’re sharing] marketing tips [and] how to implement technology better.”

The eatery has begun using ordering software company Lunchbox’s Restaurant Community, which launched Wednesday (Nov. 30), to get in touch with other small restaurants. Jones noted that these SMBs, without the resources to bring on a chief technology officer or another designated staff member, can struggle with the digital elements of the industry.

Jones noted that it has been “nice to be able to” share email templates, promo code strategies, effective wording, and initiatives that have helped drive off-peak purchases such as happy hour deals and special events.

“There are a lot of things that I as an operator wouldn’t have thought about if it weren’t for being connected to somebody in our community,” said Jones.

PYMNTS research finds that the restaurant industry has indeed been recovering, but that the gains have been modest. Data from the study “The Main Street Index Q3 2022: The Post-Pandemic State Of Play For Main Street Businesses,” which draws on data from the Quarterly Census of Employment and Wages, econometric analysis and modeling techniques to determine the overall health of Main Street SMBs, finds the eating and drinking establishments’ index has grown 1.2% last year on a CAGR basis.

Get the study: The Main Street Index Q3 2022: The Post-Pandemic State Of Play For Main Street Businesses

Additionally, findings from the Q3 edition of PYMNTS’ Main Street Health study, Main Street Health Survey Q3 2022: SMBs Battle Inflation, reveal that a small but far from negligible share of restaurants are in immediate danger. One in 12 businesses in the food, entertainment and accommodations sector reported finding it unlikely that they will make it through the next two years.

Read the report: Main Street Health Survey Q3 2022: SMBs Battle Inflation

Looking ahead, Jones hopes to see restaurants working together not only in terms of communication but also in terms of utilizing each other’s strengths and resources, more tangibly collaborating.

“There’s a lot of runway for cross-collaboration, cross-utilization of skillsets, [and] also launching brands together,” Jones said. “[For instance,] offering products to different restaurants. I think there’s such a cool, win-win level-up from there.”