State of the Restaurant Industry: Resilient

Restaurateurs, embracing a new normal for business, anticipate more opportunities for growth in the coming year despite some lingering economic and labor challenges, according to new research from the National Restaurant Association.

The 2023 State of the Restaurant Industry report indicates the industry will not only reach $997 billion in sales this year, but also increase its workforce to 15.5 million employees with the addition of 500,000 new jobs.

“Our hiring rate and wage increases are outpacing the overall private sector, and we’ll also contribute nearly $1 trillion to the economy in 2023,” said Michelle Korsmo, the Association’s President & CEO. “This year’s report offers an in-depth analysis of what’s driving that growth and the tremendous opportunities for restaurant owners, operators, and team members looking to grow their businesses and expand their careers.

“Restaurant owners have a growth mindset for 2023,” she continued. “Our data shows nearly 3 in 4 operators say business conditions are already close to normal—a new, more positive normal—or are well on that path. The focus in the coming year is on sustaining that growth.”

The report uses data from national surveys of restaurant owners, operators, chefs, and consumers to examine key factors impacting the industry, such as the current state of the economy, business operations, workforce challenges, and food and menu trends, and forecasts sales and market trends for the year ahead.

This year’s findings also focus on several economic conditions expected to impact the industry.

• The road to recovery will be long. For 20% of operators, business conditions are already close to normal. Another 30% of operators say business conditions will never return to normal. The remaining half say they’re on the path back.
• Rising costs continue to be a challenge. 92% of operators indicate higher food costs are a significant issue for them.
• Competition is heating up. 47% of operators expect competition will be more intense than last year. 

The report finds that in countering business challenges, restaurants are permanently adopting some creative and innovative solutions that were deployed out of necessity during the pandemic.

• Continuing the sale of alcohol-to-go beverages. More than 9 in 10 operators are likely to keep offering alcohol-to-go service if their jurisdiction allows it.
• Offering outdoor dining services. Across all six major dining segments, more than 9 in 10 operators said they’ll keep their outdoor seating.
• Expanding delivery options. With 66% of adult consumers saying they’re more likely to order takeout than they were before the pandemic, operators in all segments are exploring ways to grow their delivery programs. In fact, 70% of fullservice and 58% of limited-service restaurateurs say they exclusively use 3rd-party providers for delivery.
• More drive-thru opportunities. At least 4 in 10 operators in the three limited-service segments — quickservice, fast casual, and coffee and snack — say drive-thru lanes will become more common in 2023.
• Increased technology offerings. More than 4 in 10 operators plan to invest in technology, including online ordering and digital payment solutions, to increase front- and back-of-house productivity.

With new business models, re-engineered concepts, and more space allocated to off-premises business, restaurants are ready to satisfy their customer demand, said Hudson Riehle, the Association’s senior vice president of Research.

“Operators are using creative and innovative ways to develop additional revenue for their restaurants,” he said. “During the pandemic, they showed their flexibility and creativity, and invested in outdoor dining, alcohol delivery, takeout, and other off-premises options. All of it helped the industry survive the worst of times and diversify income streams. Many of those successful programs are now part of their ‘new normal’ way of operating, so as the economy recovers, operators are cautiously optimistic. Consumers crave the restaurant experience; they want to dine out, and restaurants are ready to serve them.”

Download the 2023 State of the Restaurant Industry report here.
It’s free to members, $349 for nonmembers.