The U.S. restaurant industry is showing signs of a bounceback this summer from the long-lasting effects of Covid-19 shutdowns
The industry is continuing to navigate ongoing labor shortage issues and rising costs, but positive financial reports from several major foodservice corporations are one of several metrics that lend optimism toward an industry recovery.
Houston, Texas, U.S.A.-based wholesale corporation Sysco reported in early August that it had earned record operating income for its fiscal fourth quarter and full fiscal year (FY) 2023, both of which ended 1 July.
The foodservice distributor’s operating income soared 29.5 percent in FY 2023 to USD 3 billion (EUR 2.7 billion), while its gross profit increased 13.3 percent. Sales also spiked 11.2 percent, and U.S. foodservice volume increased 5.2 percent.
“Sysco delivered another quarter of solid sales, volume, and market share gains. Our actions to improve efficiency continued in the fourth quarter with sequential improvements in supply chain productivity and additional cost outs, delivering meaningful operating expense leverage,” Sysco President and CEO Kevin Hourican said in a news release.
For FY 2023, Sysco had both top-line and bottom-line growth, as well as record free cash flow for the year, and achieved its target net debt ratio, Hourican added.
Orlando, Florida, U.S.A.-based restaurant operator Darden, which manages LongHorn Steakhouse, Olive Garden, and several fine-dining restaurants, also reported favorable fiscal year-end earnings.
Full-service and other restaurants operated by Darden performed well, as the restaurant giant said total FY 2023 sales increased 8.9 percent to USD 10.5 billion (EUR 9.6 billion), driven by same-restaurant sales increases and the addition of 47 net new restaurants. In Q4 2023, Darden’s total sales soared 6.4 percent.
Darden’s fine-dining business also increased 5.7 percent for the year; LongHorn Steakhouse sales jumped 7.4 percent, and Olive Garden sales rose 6.7 percent.
Several seafood-focused restaurant chains have also undergone expansion recently, according to Chicago, Illinois, U.S.A.-based food and beverage firm Datassential.
“During the height of the Covid-19 pandemic, consumers told us that seafood was one of the foods they missed from restaurants most,” Datassential Associate Director Mike Kostyo wrotein the company’s “Midyear Trends” report. “Now, it seems like they [consumers] may be indulging in their favorite seafood options, as the number of seafood chains that broke into the Top 500 grew 37.5 percent this year.”
In just one example of seafood restaurant growth, Nashville, Tennessee, U.S.A.-based Captain D’s, which operates 540 units across 23 U.S. states, said it aims to expand its footprint to more than 1,000 units earlier this year.. To reach that goal, it aims to open between 25 and 40 locations annually.
Elsewhere, after expanding in Singapore, Long John Silver’s (LJS) has also expanded into Indonesia and plans further growth in Southeast Asia.
Financial reports and restaurant expansions aren’t the only metrics signaling a bounceback for the restaurant industry. Overall restaurant visits rose 1 percent in June, driven by a 2 percent increase in quick-service restaurant (QSR) visits, according to new research from data firm Circana.
The average amount spent per meal at full-service restaurants (FSRs) grew 7 percent in price in June, compared to 5 percent for QSRs, Circana found.
“Many FSRs are growing, and opportunity exists for those who deliver a differentiated experience, quality food, and good value for the price,” Circana Food Industry Advisor David Portalatin said.
Restaurant job growth resumed in July, but it remained well below the gains registered during the early months of the year, according to the National Restaurant Association (NRA). Eating and drinking places, a category assigned by the U.S. Bureau of Labor Statistics (BLS), added a net 13,400 jobs in July on a seasonally adjusted basis, according to preliminary data from the BLS.
“While significant progress has been made, the size of the restaurant workforce remains below pre-pandemic levels. As of July 2023, eating and drinking places [accounted for] 64,000 jobs – or 0.5 percent – below their February 2020 employment peak,” NRA Chief Economist Bruce Grindy said.
Amid the swath of positive news for the restaurant industry, there was a 4 percent decline in FSR visits in June, reflecting consumers’ economic concerns.
“Inflation continues to remain higher for restaurants compared to retail, and this disproportionately hurts FSRs,” Portalatin told SeafoodSource.
In early June, Datassential Research and Insights Manager Huy Do, acknowledged U.S. consumers’ hesitance to eat out due to financial concerns.
“Inflation is still weighing heavy on consumers’ minds; 48 percent say they’ve cut back on dining out at restaurants in the past month,” Do said.
Additionally, there are around 24,000 fewer FSR restaurants this year than in 2019, according to Circana.
Photo courtesy of Heidi Besen/Shutterstock
