Restaurant Industry Insights

Challenges Independent Restaurant Operators Face in 2024

According to the National Restaurant Association, 8 out of 10 restaurant owners started their careers in entry-level positions, and 7 in 10 of these owners operate single-unit restaurants. These independent restaurants represent over 50% of the total restaurants in the U.S.

Some of the challenges independent restaurants face compared to their chain brethren include securing financing, finding the right location, and paying more in food costs. It’s hard to compete with large enterprises that can negotiate lower prices due to group purchases resulting in higher quantities of goods and foods.

Let’s look at the independent restaurant landscape as 2024 emerges.

Independent’s Expectations

A Nation’s Restaurant News survey in October 2023 found that 21 percent of independent restaurant operators expected traffic and sales to hold steady over the next six months, while 51% expected a slight improvement and 12% believed they would “slightly worsen.” While having a realistic bent is important in the restaurant industry, it’s also good to remember that our expectations often precede and mirror the outcome. 

As Ralph Marston said, “Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.”

Food Costs Affecting Menu Development

This survey also found that almost three in five restaurant operators felt rising food costs were hampering their menu development. Additional obstacles were persistent challenges sourcing needed ingredients, shortage in BOH staff, and recipe costing difficulties.

As an independent operator, there is additional support you can count on that helps reduce the gap between your costs and those of the neighboring chain restaurants. You may not have a team of supply chain professionals, but you do have incredible gumption; otherwise, you wouldn’t be in the restaurant industry. 

That means you embrace change and defy ruts. You may have a long-standing relationship with your distributor, but, like any relationship, it’s good to take an in-depth look at what it offers. After all, pricing transparency is critical to a restaurant’s success. You may be surprised to learn that you’re paying more for the same SKU than your neighbor down the street. 

Restaurant technology, now known as ResTech, is gaining popularity in this arena. One company, Cheetah, offers a technology-driven restaurant supply app driven by sustainable solutions that streamline supply chains and reduce food waste. It’s also focused on becoming the “Amazon of restaurant supplies,” according to Forbes. It’s a platform that enables independents to join forces and achieve purchasing power once limited to chains. 

For independent operators with multiple units, Consolidated Concepts delivers the buying power of chains to independent operators. Leveraging over $10 billion in annual purchasing volume, they put independent operators in league with the big brands. They also provide end-to-end support, from ordering to inventory management, recipe costing, accounting, rebate and spend management, price verification, and contract management.

Keeping Your Menu Updated

Working with brands that help you source supplies at fair prices can provide the resources you need for enhanced menu innovations and staying abreast of culinary trends. F&B Insights is a ResTech platform that provides you with the largest available restaurant menu database. 

Using this technology, you gain access to menus nationwide and in your community, giving you valuable information regarding up-and-coming trends and pricing structures. You also receive alerts when changes occur, ensuring you know what your competitor is up to, whether increasing menu prices or changing items.

Restaurant Business reported on the Barclays Eat Sleep Play Conference in New York City and a comment by the CEO of B.J.’s Restaurant & Brewhouse, Greg Levin. Levin believes consumers are more discerning and still recovering from sticker shock. “And I think we’re going to have to see in the industry over the next couple of years more moderate pricing or less pricing per se. So the consumer catches up to where we are today.” 

The Freedom to Choose

As an independent restaurant operator, you have the freedom to choose, creating the concept only you can visualize, from the design, menu, brand voice, and type of service. You undoubtedly possess an entrepreneurial spirit, unhindered by fear of flying on your own with no corporate office to back you. While you may not have the backing of a well-known name or proven marketing strategy, you do have the ability to take flight through your innovations and passions. At EMERGING, we wish you the best as 2023 comes to an end, and may you fly high in the coming new year. 

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