A new survey released in the United States and Canada has outlined the top challenges facing the hospitality and foodservice 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 labour costs continue to be major financial strains, operators are navigating the changing industry landscape by tapping into new revenue streams and technologies.
Topping the list was further concern for inventory costs. Of those surveyed, 58 percent noted inventory costs as their number one concern. Sixty percent of operators reported that all or most of their suppliers had raised prices in the past year, with the average expenditure on food increasing by a whopping 41 percent in the past year alone.
In response to rising inventory costs, 67 percent 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 percent, which is a drop from the average price increase of 15 percent in 2022.
On the one hand, the staffing shortage has eased significantly, with roughly four-in-five (82 percent) said they were short at least one position, which is an improvement from last year when a whopping 97 percent said the same. However, turnover rates remain unchanged from last year at 28 percent for all FSRs and 34 percent for FSRs with five or more locations.
The survey found that 46 percent 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 percent) actually report paying more than 20 percent 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 utilising technology to maximise productivity.
Despite economic uncertainty and high-interest rates, 2024 is predicted to be a year of growth for restaurants. Only six percent of operators surveyed had no expansion plans for 2024, suggesting that most full service operators are optimistic about the year ahead. Main areas of interest for expansion in the industry include real estate and location priority, off-site catering, in-store offerings, technology and automation, and the inclusion of AI.
Considering all the many challenges that U.S. operators have faces in the post-covid market, the 2024 State of Restaurants Report revealed that restaurateurs remain adaptable and resilient, and many have an optimistic outlook on the future of the industry.
