Restaurants are having their biggest year ever
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2024 will be the U.S. restaurant industry's biggest year ever in sales — $1.1 trillion by the end of December, per National Restaurant Association estimates.
Why it matters: The COVID-19 pandemic devastated the restaurant industry, but sales are now far higher than before it started — and climbing.
- That's despite big financial pressures on restaurateurs, such as tech investments and the cost of labor and food.
Driving the news: Total spending at U.S. food service establishments is expected to rise 5.4% this year, to $1.106 trillion, per the National Restaurant Association's annual "State of the Restaurant Industry" report.
- That's up from $1.049 trillion last year and $864 billion in 2019, the year before the pandemic.
To grow their businesses in an increasingly competitive environment, restaurants are looking to technology, social media, and increased catering and delivery options.
- They're trying to balance "high touch and high tech," as Michelle Korsmo, CEO of the National Restaurant Association, tells Axios.
State of play: There were more than a million unfilled jobs in restaurants and accommodations at the end of March, Korsmo said, citing Bureau of Labor Statistics figures.
- Competition for restaurant staff is "not as intense as it was before" — during the pandemic and coming out of it — but restaurant owners "definitely feel that they are in competition for the best workers," she said.
- Technology is helping — both in automating order-and-delivery systems and handling simple tasks — but can only do so much.
What they're saying: "There's no doubt the future looks like more robotics in the kitchen," Korsmo said in an interview following the National Restaurant Association's annual trade show in Chicago last month.
- "It's a question of whether robotics are in the dining room itself."
Between the lines: Inflation is prompting some diners to shift to lower-priced restaurants, seek out value meals, and take advantage of loyalty and rewards programs, Korsmo added.
- "Every operator I talked to is thinking a lot about how they make sure that they're providing the best value for the experience that they're offering," Korsmo said.
- While tipping fatigue is real, Korsmo said, the practice of tipping isn't likely to change anytime soon.
- "The professional waitstaff wants that ability to have that kind of open upside of a tipped wage environment."
By the numbers: 33% of restaurant operators expect sales to be higher this year than last, and 45% expect them to hold steady, according to a National Restaurant Association poll.
- Two-thirds say the number of restaurants in their area has rebounded from pre-pandemic levels.
- 45% say they need more employees to meet customer demand.
Zoom in: Consumer excitement around new international flavors, TikTok food trends, new takeout and delivery options, and food apps is buoying interest in restaurants.
Yes, but: Inflationary pressures and intensifying competition is squeezing margins for restaurant operators.
The bottom line: There's a lot of fresh energy and vitality in the restaurant sector these days, which bodes well for people who enjoy dining out.
