The end of the year is closing in and the best chance to gain revenue is almost here. Despite the lofty expectations placed on the holiday season, there has been a significant amount of progress made up until this point. Every industry was affected differently by this challenging year.  Segments, such as grocery chains, performed quite well during the past year and were able to surpass record setting years. Others, like restaurants, found themselves in dire straits during 2020; however, they are now in a position to capitalize on a bountiful fall by adapting to the current landscape.

Restaurant chains have had to face difficult choices, yet most find themselves in a much more advantageous position this year than last. Some of the current success is due to split second decisions made at the start of 2020 and the willingness to adapt for the long term. Casual and fine dining restaurants were put in a bind when many of their dining rooms were forced to temporarily close and needed to make decisions about all of their staff. Bloomin’ Brands and Darden both operate in the casual dining space and their approach was different while still finding success in their own way. This time last year the company was bracing for a long winter after it took some large financial loses. Those deficits were compounded by the bold decision not to furlough their employees like many of their competitors. It did cost the company in the short term; however, when dining rooms reopened, they hit the ground running while others struggle because of the labor shortage. This has led to a nice recovery and this company is set up for a strong finish to the year. Darden restaurants were also faced with similar issues; however, due to the company’s larger footprint force their hand into furloughing employees. When dining rooms reopened, this company did not have enough workers to effectively run their restaurants. Instead of trying to fill every position, Darden leaned on technology and spending cuts to supplement the lost workforce. They cut marketing spending, streamlined ordering processes, and reduced the size of menus. Those decisions have paid dividends for the brand throughout the year. Both Darden and Bloomin’ Brands are prepared for a record setting holiday even though they took very different paths to get here.

Grocery stores had the polar opposite experience to restaurants last year. Most major chains hit record sales even with supply chain and employee shortages. Through August of last year Costco was doing very well seeing over a $10 billion jump in profits; however, there were new challenges to face in 2021. Supply chain deficiencies and rising costs threatened the customer base they had built. They have also combated these problems in part by keeping consumer cost low and avoiding the price hikes of competitors. The company has also charted additional shipping vessels and stocked their warehouses early with supplies of holiday items. These movements have set the company apart from competitors and it could translate into huge profits for the remainder of the year. Kroger was another grocery chain that saw high profit margins, even though their numbers were lower than some of their largest competitors. Despite a successful holiday season, Kroger is potentially facing slower momentum this year due to the same costs and supply chain issues that are racking every industry. Kroger has been able to avoid the pitfall of some other chains thanks to an investment they made several years ago in prepared meal kit company Home Chef. These kits became very popular and even restaurants got in on the action, although Kroger already had the infrastructure built into their stores. They also invested heavily in online sales that have helped offset labor shortages and supply issues. These long term investments will benefit the company for this holiday season.

There are still more challenges and victories to come in 2021 and beyond. We have already seen how the hardships of last year have molded companies and placed them in a position to be successful moving forward. The pandemic created unpredictable scenarios and it has been fascinating to see how approaches from each industry have carved different paths to profitability. The innovations and decisions made for this holiday season will alter the outlook for 2022.