First, Carl modernized the Krusty Krab. Now, he’s modernizing all of America.

Business spending is on the rise, led by software and technology, with one industry investing in technology more than ever – the restaurant industry.

Business spending: The economy’s lifejacket

Consumer spending, which accounts for ~2/3 of economic output, has driven America’s recovery from the pandemic. Government stimulus helped with this – but what happens when the money’s gone?

Enter, business spending. When consumer spending cools off, investments by businesses rise to prop up the economy. And we’re already seeing this trend:

• Business investment is now higher than its pre-pandemic peak.
• U.S. capital spending is expected to reach 116% its pre-pandemic peak within 3 years.

The restaurant revolution

With dining rooms closed during the pandemic, online food orders rose to a record $435b in 2020. To meet demand, the restaurant industry rapidly invested in technology:

• 61% of online food orders in 2020 were at restaurants without an online system before the pandemic.
• 27% of restaurants used third-party delivery services (ie. DoorDash, etc.) by last September.

With 75% of restaurants planning to keep contactless ordering and payment options, the landscape of the restaurant industry is forever changed.

According to Phil Suttle of Suttle Economics – “Every part of the service economy is using technology more aggressively” and that means continued investment in the future of foodservice.

Investors: Software, point of sale and chicken robots

The companies benefiting the most from digitalization aren’t restaurants, but the point of sale tech companies providing digital tablets and restaurant software. In the last year:

• Lightspeed’s (NYSE:LSPD) sales have nearly quadrupled in the last four years, and its share price is up 292%.
• Shift4 Payments’ (NYSE:FOUR) sales grew 23% in the first quarter of 2021, and its share price is up 282%.

How fast is the industry being digitized? Just ask the chicken frying robots at White Castle.

Who else: Olo (NYSE:OLO), the restaurant ordering software sending text messages to printers before the iPhone was invented, is one of the few profitable companies in the space.