Restaurants Focused on Paths to Continued Growth in 2023
The National Restaurant Association's State of the Restaurant Industry Report
The National Restaurant Association released its 2023 State of the Restaurant Industry report, which examines key factors impacting the industry including the current state of the economy, operations, workforce, and food and menu trends to forecast sales and market trends for the year ahead. The report is an authoritative look at the industry and its opportunities based on a range of national surveys of restaurant owners, operators, chefs, and consumers.
Key findings illustrating the industry’s economic conditions include:
“The restaurant and foodservice industry is fueling the American economy. Our hiring rate and wage increases are outpacing the overall private sector, and this year our industry will contribute nearly $1 trillion to the economy,” said Michelle Korsmo, president & CEO of the National Restaurant Association. “The 2023 State of the Restaurant Industry report offers an in-depth analysis of what’s driving this growth and the tremendous opportunities for restaurant owners, operators, and team members who want to grow their businesses and expand their careers.”
Key findings illustrating the industry’s economic conditions include:
- Growth will continue: The foodservice industry is forecast to reach $997 billion in sales in 2023, driven in part by higher menu prices.
- Industry help wanted: The foodservice industry workforce is projected to grow by 500,000 jobs, for total industry employment of 15.5 million by the end of 2023.
- Building on a Solid Foundation: For 70% of operators, business conditions have settled into or are on the path to their new version of normal.
- Consumers want restaurant experiences: 84% of consumers say going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up.
- Rising costs create challenges: 92% of operators say the cost of food is a significant issue for their restaurant.
- Competition is heating up: In 2023, 47% of operators expect competition to be more intense than last year.
“The restaurant and foodservice industry is fueling the American economy. Our hiring rate and wage increases are outpacing the overall private sector, and this year our industry will contribute nearly $1 trillion to the economy,” said Michelle Korsmo, president & CEO of the National Restaurant Association. “The 2023 State of the Restaurant Industry report offers an in-depth analysis of what’s driving this growth and the tremendous opportunities for restaurant owners, operators, and team members who want to grow their businesses and expand their careers.”
Pandemic Pivots become Permanent
The temporary “pivots” developed during the pandemic — expanded delivery services, outdoor dining options, to-go alcohol offerings, and investments in technology — are the foundation of the industry’s “new normal.” At least 4 in 10 operators in each of the three limited-service segments — quickservice, fast casual, and coffee and snack — believe the addition of drive-thru lanes will become more common in 2023. For others, outdoor dining and alcohol-to-go are becoming table stakes. Across all six major segments, more than 9 in 10 operators plan to continue offering outdoor seating and the same number of operators are also likely to continue offering alcohol-to-go, if their jurisdiction allows it.
Despite widespread investment in technology in the last few years, the restaurant industry is still far from becoming a tech-centric sector. Most operators still consider their use of technology as mainstream rather than leading edge.
In 2023, many operators want to keep moving toward the edge, with more than 4 in 10 planning investments in equipment or technology to increase front- and back-of-the-house productivity. These investments are anticipated mostly in the order and payment space, rather than automated systems or robots that prepare and serve food.
An Industry of Opportunity
The restaurant and foodservice industry added 2.8 million jobs over the past 24 months, bringing the industry total to 15 million at the end of 2022; however, the foodservice industry remains 400,000 jobs below pre-pandemic levels.
Most restaurant operators will be actively looking to boost staffing levels in 2023, while carefully balancing staffing needs with business conditions. Eighty-seven percent of operators say they’ll likely hire additional employees during the next 6–12 months if qualified applicants are available.
Flexibility to Accommodate Rising Food Costs and All-Hours Dining
Demand for restaurant experiences remains strong among consumers who are hungry to connect over shared meals. Operators are taking creative cost-saving approaches to temper elevated expenses, including food, labor, occupancy, and utilities, by streamlining their menus. With the rise of remote work blurring traditional meal times, operators are focusing on new opportunities to entice customers at all hours with engaging offerings, including off-hours or slow-day value deals, flexible pricing, multi-course meal bundles, meal kits and subscriptions, apparel, and more.
“As the restaurant industry adapts to a new normal, operators’ ability to be flexible and diversify their operations is essential to thriving,” said Hudson Riehle, senior vice president of Research for the National Restaurant Association. “With profitability under pressure, operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises business in order to satisfy customers in 2023.”
The temporary “pivots” developed during the pandemic — expanded delivery services, outdoor dining options, to-go alcohol offerings, and investments in technology — are the foundation of the industry’s “new normal.” At least 4 in 10 operators in each of the three limited-service segments — quickservice, fast casual, and coffee and snack — believe the addition of drive-thru lanes will become more common in 2023. For others, outdoor dining and alcohol-to-go are becoming table stakes. Across all six major segments, more than 9 in 10 operators plan to continue offering outdoor seating and the same number of operators are also likely to continue offering alcohol-to-go, if their jurisdiction allows it.
Despite widespread investment in technology in the last few years, the restaurant industry is still far from becoming a tech-centric sector. Most operators still consider their use of technology as mainstream rather than leading edge.
In 2023, many operators want to keep moving toward the edge, with more than 4 in 10 planning investments in equipment or technology to increase front- and back-of-the-house productivity. These investments are anticipated mostly in the order and payment space, rather than automated systems or robots that prepare and serve food.
An Industry of Opportunity
The restaurant and foodservice industry added 2.8 million jobs over the past 24 months, bringing the industry total to 15 million at the end of 2022; however, the foodservice industry remains 400,000 jobs below pre-pandemic levels.
Most restaurant operators will be actively looking to boost staffing levels in 2023, while carefully balancing staffing needs with business conditions. Eighty-seven percent of operators say they’ll likely hire additional employees during the next 6–12 months if qualified applicants are available.
Flexibility to Accommodate Rising Food Costs and All-Hours Dining
Demand for restaurant experiences remains strong among consumers who are hungry to connect over shared meals. Operators are taking creative cost-saving approaches to temper elevated expenses, including food, labor, occupancy, and utilities, by streamlining their menus. With the rise of remote work blurring traditional meal times, operators are focusing on new opportunities to entice customers at all hours with engaging offerings, including off-hours or slow-day value deals, flexible pricing, multi-course meal bundles, meal kits and subscriptions, apparel, and more.
“As the restaurant industry adapts to a new normal, operators’ ability to be flexible and diversify their operations is essential to thriving,” said Hudson Riehle, senior vice president of Research for the National Restaurant Association. “With profitability under pressure, operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises business in order to satisfy customers in 2023.”
