Brown Bacon AI’s 2024 Report on Restaurant Industry Outlook & Financial Performance
2024 Report on Restaurant Industry Outlook
Brown Bacon AI’s Report on
Restaurant Industry Outlook & Financial Performance
Stats Snapshot
Sales Expectations:
Around 80% of restaurant operators expect their sales to increase (33%) or hold steady (45%) in 2024 compared to 2023.
22% of operators anticipate lower sales volume.
Profitability Challenges:
93% of operators cite the economy as a significant or moderate challenge.
97% are concerned about food costs.
98% are worried about inflation.
98% are concerned about labor costs.
More than a third (38%) say their restaurant was not profitable last year.
Expansion Plans:
22% of operators plan to use the challenging business environment as an opportunity to expand.
Limited-service operators (29%) are more likely than full-service operators (16%) to report plans to add locations this year.
Technology Adoption:
76% of operators believe using technology gives them a competitive edge.
Only 13% feel their restaurant is on the leading edge in terms of innovation compared to peers.
23% say their operation is lagging in technology adoption.
Staffing and Labor:
45% of operators say their restaurant doesn’t have enough employees to support existing customer demand.
70% indicate they have job openings that are hard to fill.
67% of operators with difficult-to-fill openings are having trouble finding applicants for kitchen positions.
60% of operators say their staffing level is more than 10% below what they need.
Wage and Labor Costs:
Average wages are up more than 30% from 2019 levels.
71% of operators plan to raise menu prices in 2024.
47% plan to provide more special offers and discounts to guests.
20% are adding less expensive menu options.
Consumer Trends and Preferences:
70% of adults are open to using options that allow them to place their order in advance online, schedule a time to arrive at the restaurant, and get their food shortly after they’re seated.
39% of quick-service customers say tech options have a positive impact on their experience.
Investment in Technology:
55% of operators plan to make the service area more productive.
45% plan to enhance kitchen productivity.
45% are focusing on strengthening cybersecurity.
Debt and Supply Chain Issues:
40% of operators say their restaurant is still carrying debt accumulated during the pandemic.
54% report delays or shortages of equipment.
48% report delays or shortages of food.
Future Workforce Projections:
The restaurant workforce is projected to grow by 200,000 jobs in 2024, reaching a total of 15.7 million jobs.
31% of operators expect recruiting and retaining employees to be even tougher in 2024, while 58% anticipate it to be about the same as 2023.
These statistics provide a comprehensive overview of the current state and future outlook of the restaurant industry from the perspective of restaurateurs. They highlight the challenges and opportunities in areas such as sales, profitability, technology adoption, staffing, and consumer preferences. If you need more detailed information or specific insights, feel free to ask!
In-Depth Report
Key Statistics & Implications for Restaurateurs
1. Sales Expectations
Overview: Despite the challenging business environment, a significant portion of restaurant operators remain optimistic about their sales prospects for 2024.
Key Statistics:
80% of restaurant operators expect their sales to increase (33%) or hold steady (45%) in 2024 compared to 2023.
22% of operators anticipate lower sales volume.
Implications:
Optimism: The majority of operators are cautiously optimistic, indicating resilience and adaptability in the face of economic challenges.
Strategic Planning: Operators are likely to focus on strategies that can sustain or boost sales, such as menu innovation, marketing, and customer engagement.
2. Profitability Challenges
Overview: Profitability remains a significant concern for restaurateurs, with multiple factors contributing to financial pressures.
Key Statistics:
93% of operators cite the economy as a significant or moderate challenge.
97% are concerned about food costs.
98% are worried about inflation.
98% are concerned about labor costs.
More than a third (38%) say their restaurant was not profitable last year.
Implications:
Cost Management: Operators need to implement effective cost management strategies to mitigate the impact of rising expenses.
Profitability Focus: Ensuring profitability will require a balanced approach to pricing, cost control, and operational efficiency.
3. Expansion Plans
Overview: Despite the challenging environment, some operators see opportunities for growth and expansion.
Key Statistics:
22% of operators plan to use the challenging business environment as an opportunity to expand.
Limited-service operators (29%) are more likely than full-service operators (16%) to report plans to add locations this year.
Implications:
Growth Opportunities: Operators with a strong financial position may capitalize on market opportunities to expand their footprint.
Strategic Expansion: Careful planning and market analysis will be crucial for successful expansion.
4. Technology Adoption
Overview: Technology is increasingly seen as a competitive advantage, but many operators feel they are lagging in adoption.
Key Statistics:
76% of operators believe using technology gives them a competitive edge.
Only 13% feel their restaurant is on the leading edge in terms of innovation compared to peers.
23% say their operation is lagging in technology adoption.
Implications:
Competitive Edge: Embracing technology can enhance operational efficiency, customer experience, and overall competitiveness.
Investment in Innovation: Operators need to invest in the right technologies to stay ahead of the curve and meet evolving customer expectations.
5. Staffing and Labor
Overview: Staffing remains a significant challenge, with many operators struggling to meet customer demand due to labor shortages.
Key Statistics:
45% of operators say their restaurant doesn’t have enough employees to support existing customer demand.
70% indicate they have job openings that are hard to fill.
67% of operators with difficult-to-fill openings are having trouble finding applicants for kitchen positions.
60% of operators say their staffing level is more than 10% below what they need.
Implications:
Recruitment and Retention: Effective recruitment and retention strategies are essential to address labor shortages.
Operational Adjustments: Operators may need to adjust operations to cope with staffing challenges, such as cross-training employees and optimizing labor schedules.
6. Wage and Labor Costs
Overview: Rising wages and labor costs are putting pressure on profitability, prompting operators to adjust pricing and menu offerings.
Key Statistics:
Average wages are up more than 30% from 2019 levels.
71% of operators plan to raise menu prices in 2024.
47% plan to provide more special offers and discounts to guests.
20% are adding less expensive menu options.
Implications:
Pricing Strategies: Operators need to carefully balance price increases with value offerings to maintain customer satisfaction.
Cost Control: Managing labor costs through efficient scheduling and productivity improvements will be crucial.
7. Consumer Trends and Preferences
Overview: Understanding consumer preferences and adapting to their needs is key to attracting and retaining customers.
Key Statistics:
70% of adults are open to using options that allow them to place their order in advance online, schedule a time to arrive at the restaurant, and get their food shortly after they’re seated.
39% of quick-service customers say tech options have a positive impact on their experience.
Implications:
Tech Integration: Investing in technology that enhances the customer experience can drive satisfaction and loyalty.
Customer Engagement: Operators should focus on understanding and meeting customer preferences to stay competitive.
8. Investment in Technology
Overview: Operators are prioritizing technology investments to improve productivity and security.
Key Statistics:
55% of operators plan to make the service area more productive.
45% plan to enhance kitchen productivity.
45% are focusing on strengthening cybersecurity.
Implications:
Operational Efficiency: Technology investments can streamline operations and improve service quality.
Cybersecurity: Protecting customer data and business operations from cyber threats is essential for maintaining trust and compliance.
9. Debt and Supply Chain Issues
Overview: Debt and supply chain disruptions continue to pose challenges for many operators.
Key Statistics:
40% of operators say their restaurant is still carrying debt accumulated during the pandemic.
54% report delays or shortages of equipment.
48% report delays or shortages of food.
Implications:
Debt Management: Operators need to develop strategies to manage and reduce debt while maintaining financial stability.
Supply Chain Resilience: Building resilient supply chains and diversifying suppliers can help mitigate disruptions.
10. Future Workforce Projections
Overview: The restaurant workforce is expected to grow, but staffing challenges are likely to persist.
Key Statistics:
The restaurant workforce is projected to grow by 200,000 jobs in 2024, reaching a total of 15.7 million jobs.
31% of operators expect recruiting and retaining employees to be even tougher in 2024, while 58% anticipate it to be about the same as 2023.
Implications:
Workforce Planning: Effective workforce planning and development strategies are essential to meet future staffing needs.
Employee Retention: Focusing on employee satisfaction and retention can help address ongoing labor challenges.
Conclusion
The restaurant industry is navigating a complex landscape of challenges and opportunities. While operators face significant pressures related to profitability, labor, and supply chain issues, there is also optimism about sales growth and the potential for expansion. Embracing technology, understanding consumer preferences, and implementing effective cost management and staffing strategies will be crucial for success in the coming years. By staying informed and adaptable, restaurateurs can position themselves to thrive in a dynamic and competitive market.