US restaurants raising prices, streamlining menus
Year-over-year sales totals at U.S. restaurants rose significantly in January, but foodservice operators continue to remain plagued by sky-high food, labor, and energy prices.
Sales at U.S. eateries soared 24 percent in January to USD 95.5 billion (EUR 90 billion) on a seasonally adjusted basis in January, according to preliminary data from the U.S. Census Bureau. The figure is also up over both November and December 2022, which each saw roughly USD 89 billion (EUR 84 billion) in sales, according to the National Restaurant Association.
The U.S. foodservice industry is expected to grow this year due to strong demand and consumers’ continued willingness to pay higher prices, the NRA found in its 2023 State of the Restaurant Industry
The survey found 84 percent of U.S. consumers believe going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up. while 44percent said they are not dining out as often as they would like, and 36 percent are not ordering take-out as often as they would like.
NRA projects total U.S. restaurant sales hitting USD 997 billion (EUR 940 billion) in 2023, partly driven by higher menu prices. And the foodservice industry workforce is projected to grow by 500,000 jobs, accounting for around 15.5 million jobs nationwide by the end of 2023.
“Moving forward, consumers are expected to remain resilient in the coming months, even in the face of an economy that is likely to slow,” NRA Economist Bruce Grindy said. “Healthy household balance sheets, a buoyant labor market, and moderating inflation will give consumers the wherewithal to continue burning off the pent-up demand that they accumulated during the pandemic.”
However, the trifecta of higher food costs, labor costs, and energy costs are now a significant challenge for a majority of restaurant operators, according to the NRA's Business Conditions survey, released in January. A vast majority (92 percent) of restaurant operators surveyed say food costs are a significant challenge, and 89 percent said labor costs are a significant challenge. As a result, 50 percent of operators expect lower profits in 2023. And 93 percent of operators say their restaurants’ total food costs are higher than they were in 2019.
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