Background The restaurant business in Sweden was severely affected by the covid-19 crisis. Many of them had decreased in sales and went bankrupt. Digitalization could be one of the solutions to cope with the condition. However, previous research indicated that a paradox might happen while implementing digital technology. It is a condition where businesses cannot achieve expected performance despite digitalization. Some scholars argue that such conditions happen due to failure to evaluate the business models before implementing digital technology. Therefore, it is interesting to analyze these phenomena regarding digitalization in the restaurant business in Sweden, especially during the covid-19 crisis.

Purpose This study aims to analyze the perceived business performance of digitalization in the Swedish restaurant business and how they evaluated their digital business model before the digitalization during the covid-19 crisis. Further, based on the perceived performance and business model evaluations, we could find if the digitalization paradox occurs.

Method The study is a qualitative study with an inductive approach to answering the research purpose. Primary data is gathered through semi-structured interviews of 11 restaurant businesses in Sweden and complemented using secondary data such as available data on the restaurants’ websites and social media. Further, empirical data is analyzed through a thematic analysis to derive a conclusion in this research context.

Findings Restaurant businesses in Sweden perceived positive and negative business performance by implementing digital technology during the covid-19 crisis. Some participants perceived positive performance through increased operation agility, increased customer engagement, and addressable market and revenue enhancement. On the contrary, perceived negative business performance are increased cost of operation, negative customer engagement, and digital antagonism. In addition, some participants evaluate their business model through experimentations, observation, reflection, conversation with other employees and customers, price comparison, and profit-cost analysis. Finally, despite the digitalization and business model evaluation, there is evidence of the digitalization paradox.