TORONTO & NEW YORK (January 17, 2024) – All-in-one restaurant management system, TouchBistro, today releases its annual 2024 State of Restaurants Report, outlining the top challenges facing the industry, alongside the emerging trends shaping it. The survey of 600 full-service restaurant owners, CEOs, general managers and area managers from across the U.S. reveals that while food costs and labor costs continue to be major financial strains, operators are navigating the changing industry landscape by tapping into new revenue streams and technologies.
In 2023, and going into 2024, top pain points that operators face include:
- Inventory costs are top concern: 58% of those surveyed note inventory costs as their number one concern. Sixty percent of operators reported that all or most of their suppliers have raised prices in the past year, with the average expenditure on food increasing by a whopping 41% in the past year alone.
- Menu prices reflect inventory costs: In response to rising inventory costs, 67% of restaurateurs raised their menu prices in the past six months. While this demonstrates that operators are still resorting to price hikes to offset rising costs, these pricing increases were slightly smaller than the previous year. In 2023, operators reported raising menu prices by an average of 13%, which is a drop from the average price increase of 15% in 2022.
- Staff turnover rates remain high: On the one hand, the staffing shortage has eased significantly, with roughly 4-in-5 (82%) saying they were short at least one position, which is an improvement from last year when a whopping 97% said the same. However, turnover rates remain unchanged from last year at 28% for all FSRs and 34% for FSRs with five or more locations.
- Commission fees still eating into profits: 46% of operators added more off-premise ordering options to boost profits, however, they are not keeping all of these profits, as nearly a quarter (24%) actually report paying more than 20% in commission fees on each order.
In the face of hurdles on multiple fronts, U.S. operators have begun tapping into new revenue streams, focusing on customer retention, and utilizing technology to maximize productivity.
Expansion of Offerings
Despite economic uncertainty and high interest rates, 2024 is looking like a year of growth for restaurants. Only 6% of operators surveyed had no expansion plans for 2024, suggesting that most full service operators are optimistic about the year ahead.
Expansion plans include:
- Location, location, location: Not far behind on the expansion to-do list is opening up new locations. Forty-three percent of restaurateurs plan to add a new location in the coming year, and 44% are planning to add multiple new locations.
- Off-site catering: 54% plan to add catering services, tapping into growing demand from the return to the office and in-person events.
- In-store offerings: With inflation-weary customers tightening their wallets, restaurants are looking to expand their in-store products in order to open up new revenue-boosting opportunities. Forty-five percent of operators said they offer prepared foods, 42% noted they sell grocery and other pantry items, and 39% sell branded merchandise.
“Modern restaurant technology has been a boon for restaurants looking to add new locations; it ensures consistency and allows for the gathering of information from multiple stores. As nearly half of operators plan to open new locations next year, technology will be essential in this process,” said Samir Zabaneh, Chairman and CEO of TouchBistro. “Having all your essential tools accessible from one central system not only makes things easier from an operational perspective, it also allows you to expand quickly and cohesively without complicating your restaurant’s tech stack.”
Things are also changing on menus as operators adapt to evolving customer demand. These changes suggest operators are not only adapting their menus to align with changing consumer preferences, but also looking for opportunities to introduce in-demand offerings that consumers are more willing to pay a premium for:
- Thirty-eight percent noted they are planning to add more plant-based, vegan options.
- Thirty-eight percent also said they want to add more gluten-free options.
- Almost 1-in-3 (31%) said they are looking to add more non-alcoholic drink options.
- Forty-two percent of operators plan to add more locally sourced ingredients to their menu in the next six months.
Technology and Automation
With expansion and increased efficiency a top priority for operators in 2024, technology is helping to reduce costs by streamlining tedious back of house tasks and increasing staff productivity.
Key takeaways include:
- The role of automation: Operators noted that productivity has become the number one priority for saving on labor costs. Forty-five percent said their goal is to increase productivity, over 10% higher than last year (34%), and automation is key to this goal.
- AI becomes mainstream: A whopping 89% of operators surveyed are already using AI in their restaurants in some way. The top three ways operators are using AI are through digital assistants (35%), AI chatbots (34%) and predictive analytics/reporting (31%). While these applications of AI may not be apparent to most consumers, restaurateurs are already reaping the benefits of these tools behind the scenes.
“By automating tedious, routine processes that would usually have someone stuck in an office for hours on end, it gives staff back valuable time. In turn, that time can be spent on more meaningful work, such as customer service and creating real connections with diners,” said Samir Zabaneh. “The true benefit of technology for the restaurant industry is that it allows people to focus their time and energy on growing their business, rather than being burdened by paperwork. In our research, we found that almost three quarter (72%) of operators have automated online ordering, 70% have automated payroll, and 67% have automated invoicing – all everyday tasks that can significantly slow down operations when done manually.”
Despite the many challenges that U.S. operators face, the 2024 State of Restaurants Report reveals that restaurateurs remain adaptable and resilient, and many have an optimistic outlook on the future of the industry. Many took the opportunity to reevaluate their businesses’ needs in 2023, carefully considering everything from where automation and AI can improve day-to-day operations to creating more innovative menus. In short, it was a year characterized by a lot of regrouping and reorienting of business priorities.
TouchBistro’s core mission is to support operators’ ambitions and business growth, whether that is by making it easier to franchise or build loyalty programs. By aggregating multiple complicated processes into one, easy-to-use system, TouchBistro frees up operators to be able to focus on what matters – their food and their customers. Though 2024 is guaranteed to come with its own set of challenges, this openness and willingness to leverage the incredible power of technology is sure to give operators the competitive edge they need to continue growing.
The 2024 State of Restaurants Report can be downloaded for free HERE.
To learn more about TouchBistro, go to www.touchbistro.com.
About The State of Restaurants Report
TouchBistro partnered with research firm Maru/Matchbox to survey more than 600 full service restaurant owners, presidents, and area/general managers across all 50 states, with an added focus on six key cities: New York City, Los Angeles, San Francisco, Chicago, Houston, and Miami. The research was conducted from June 15 to June 22, 2023. The statistically significant survey results are accurate 19 times out of 20.
TouchBistro is an all-in-one POS and restaurant management system that makes running a restaurant easier by providing essential front of house, back of house, and guest engagement solutions on one powerful platform. TouchBistro helps restaurateurs streamline and simplify their operations, increase sales, and deliver a great guest experience. For additional information, visit TouchBistro.com.