The National Restaurant Association (NRA) has forecasted restaurant sales to exceed USD 1.1 trillion (EUR 1 trillion) in 2024.
Nearly eight in 10 restaurant operators anticipate their sales will either increase (33 percent) or at least hold steady (45 percent) compared to last year, according to the NRA’s “2024 State of the Restaurant Industry Report.”
However, 97 percent of restaurant operators say they are still struggling with higher food and labor costs. Average food costs have increased more than 20 percent and average wages more than 30 percent compared to 2019, the NRA found.
Seventy-seven percent of operators also say their restaurant experienced supply delays or shortages of key food or beverage items in 2023 and reported needing to find new suppliers, removing items from their menus, adjusting portion sizes, or substituting lower-cost items due to elevated food prices.
In addition to higher food costs, 98 percent of operators say higher labor costs are an issue for their restaurant, and 38 percent said their restaurants were not profitable last year. Only 27 percent of restaurant operators expect to be more profitable this year, despite a higher percentage than that believing they will increase their sales.
The U.S. Bureau of Labor Statistics found menu prices jumped 7.1 percent last year, as grocery prices rose 5 percent. NRA Research and Knowledge Group Senior Vice President Hudson Riehle said U.S. consumers are have grown more cautious in their spending, which could impact the frequency at which they go to restaurants.
Nearly half of consumers are taking a “wait-and-see stance” when it comes to spending, according to Riehle. He said consumers’ disposable income is expected to increase only 1.5 percent this year.
As a result, restaurant operators who “offer a solid value proposition for dining out can nudge customers out of their holding pattern,” NRA said.
The majority of consumers – particularly younger generations – appreciate variable pricing on menus, Riehle said. Consumers are also looking for smaller portion options; 75 percent would opt for smaller-sized portions for a lower price, and 70 percent said they often look for a daily special or discount.
There is also a massive opportunity for home delivery services in 2024, as well as restaurants with robust takeout infrastructure, according to Riehle, with 67 percent of adults saying they’d be interested in a meal delivery subscription that offered a specified number of meals each month.
A majority of consumers (88 percent) surveyed report being satisfied with their variety of local food options for takeout and delivery. Better yet for restaurant operators offering takeout, 52 percent of consumers – including 67 percent of millennials and 63 percent of Gen Z adults – say ordering takeout from a restaurant is an essential part of their lifestyle.
“This is an historic and exciting year for the restaurant industry,” Riehle said in the press release. “While challenges remain, including inflation, recruitment, higher operating costs and profitability, restaurant operators will continue to innovate and evolve to meet customer demands.”
Riehle predicted an “exciting year” for the U.S. foodservice sector, with job growth likely. The restaurant and foodservice industry is projected to add 200,000 jobs in 2024, bringing total industry employment to 15.7 million, the NRA found.
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