Restaurant M&A Expected To Surge With End Of Pandemic Lockdowns
Even though these acquisitions will be made with an eye to growth, restaurants are facing a serious problem with labor availability.
Restaurant M&A is expected to surge with the end of pandemic lockdowns, according to a recent report from S&P Global Market Intelligence.
“A year and a half’s worth of investment is going to get pushed through in a six- to nine-month period, starting now,” Ashleigh Evans, director of operations analytics at research firm Aaron Allen & Associates LLC told S&P.
Also to back up its prediction, S&P cited April figures from Global Industry Analysts Inc. the global restaurant and mobile food service markets stand to grow to $2.6 trillion by 2027 from $2.1 trillion in 2020 at a compound annual growth rate of 3%.
Among restaurant deals this year:
In January, private equity firm Inc Retail Group Ltd. said it was purchasing UK salad bar company Chop’d Ltd from Calculus Capital Ltd.
This March, Thompson Street Capital Partners announced it was buying Freddy’s LLC, a custard and steakburger chain.
Also in March, an undisclosed buyer announced the purchase of Naf Naf Grill, a restaurateur specializing in Middle Eastern food from Roak Capital Group.
Growth Without Labor?
Even though these acquisitions will be made with an eye to growth, restaurants are facing a serious problem with labor availability.
Hospitality jobs are unpopular and raising the wage may not be enough to lure many former workers back.
According to a survey by Joblist, 38% of former hospitality workers report that they are not even considering a hospitality job for their next position. These workers are transitioning out of the industry in search of a different work setting (52%), higher pay (45%), better benefits (29%), and more schedule flexibility (19%).
Over 50% of former hospitality workers who are looking for other work say that no pay increase or incentive would make them return to their old restaurant, bar, or hotel job.