EMERGINGRestaurant Industry Insights

The Condition of the Restaurant Industry in 2024

The National Restaurant Association recently released its 2024 State of the Restaurant Industry report. Based on the association’s economists and surveys of restaurant operators, it revealed some interesting trends impacting the industry as the new year unfolds. 

From sales to hiring and costs, it revealed an industry on the upswing with some challenges still in its midst. Let’s explore some of the findings from their latest report.

Sales

The National Restaurant Association forecasts the food service industry to reach $1.1 trillion in sales in 2024. That’s over $3 billion more than the projected forecast for 2023. That positive note comes on the heels of the noted traffic growth as 2023 came to a close. Year-over-year traffic growth showed improvement since September 2023, with same-store sales growth at 2.3% in December and 1.9% in November.

Many have been surprised at the strength of consumer spending despite fears of a recession. As Hudson Riehle of the National Restaurant Association said, “The consumer continues to hold restaurant spend in a preferred and in many cases, essential category.”

Remember that 43% of operators say they still have debt brought on by the pandemic.

Hiring

According to the National Restaurant Association’s surveys, 45% of operators still need additional employees. Because of this, they project the industry’s workforce will grow by 200,000 jobs by the end of 2024, bringing the total to 15.7 million. In 2019, that figure stood at about 13.5 million. Over the next eight years, the industry will likely add 1.2 million jobs, resulting in about 16.9 million employees by 2032.

One of the biggest employers, Chipotle, hopes to hire 19,000 workers by spring. Over 73% of their employees are Gen Z. Considering this, they’re offering benefits that target the needs and challenges of this generation, including a new Employee Assistance Program that provides financial wellness and mental well-being support. 

Today, 27% of operators believe recruiting and retaining employees will be the biggest challenge, and 88% will hire if they can find qualified applicants in 2024. About 47% of operators will use tech to help minimize labor challenges.

Competition

About 45% of restaurant operators believe competition will heat up in 2024. According to a survey by TouchBistro, a whopping 94% of full-service restaurant operators have some form of expansion plans in the mix for 2024. This includes 44% planning to open multiple new locations and 54% adding catering services.

Costs

Costs are still trending upwards, with 98% noting higher labor costs and 97% reporting higher food costs. About 38% of restaurants said they were not profitable in 2023.

Another interesting outcome was food and menu trends, with 7 in 10 operators planning on retaining the same number of menu items as last year.

Value-Conscious Consumers

About half of all consumers were taking a wait-and-see outlook regarding spending. The association suggests, “Operators who offer a solid value proposition for dining out can nudge customers out of their holding pattern.” These consumers also noted their love for restaurants, with 9 out of 10 saying they enjoy going to restaurants and experiencing meals with flavors and sensations they can’t replicate at home.

Surveys suggest a much greater number of consumers in a holding pattern, with 90% of operators saying customers are more value conscious. Interestingly, over 80% of consumers not enrolled in a loyalty program would join one if offered. Additionally, 8 in 10 said they would take advantage of discounts provided during off-peak times or slower days of the week.

The Lesson Behind These Figures

So, what do these numbers tell us? It depends if you’re a glass-half-full person or a “someone drank half my beverage when I wasn’t looking” person. The restaurant industry always, in one form or another, seems to be at a critical juncture. But it’s the thrill of the unknown and the excitement of another day that keeps the tough go-getters in this industry jumping out of bed. 

As Andy Rooney said, “Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you’re climbing it.”

At EMERGING, we help leading restaurants and entertainment concepts take that quantum leap to the next level. By coordinating business strategies in real estate and expansion, supply chain opportunities, finance, and labor recruiting and retention, we provide unprecedented value from one platform. To learn more about the opportunities that await you or to schedule a consultation, contact EMERGING today.

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