RESTAURANTS

Delivery, Promotions Drive Restaurant Industry Sales Forecast Of $1.1 Trillion

• by Teresa Buyikian , Yesterday

Restaurant operators have a lot to look forward to in 2024, at least according to the National Restaurant Association 2024 State of the Restaurant Industry Report.

The recently published report, seen here, forecasts restaurant sales to exceed $1.1 trillion for 2024, a new record for the industry that is also slated to employ over 15.7 million people for the year.

Many factors contribute to the positive forecast. Restaurant operators are optimistic; nearly eight in 10 predict their sales will increase (33%) or hold steady (45%) as compared to 2023.

As far as profitability, goes, operators are a little more cautious, with only 27% expecting to be more profitable this year. “Average food costs have increased more than 20% and average wages more than 30% from 2019—both impacting profitability,” per the report.

Delivery, carryout and drive-thru continues to be a core part of the restaurant business and is only expected to grow. Fifty-two percent of consumers – which includes 67% of millennials and 63% of Gen Z-ers -- say ordering takeout is “an essential part of their lifestyle.”

Employment has increased, but operators are still short-staffed. Forty-five percent of restaurant operators still need more employees, and 70% have job openings that are hard to fill. The industry is projected to add 200,000 jobs in 2024, bringing total industry employment to 15.7 million.

"With more than $1 trillion in sales expected this year, the state of the restaurant industry is strong thanks to the agility of its operators and employees," said Michelle Korsmo, president and CEO of the National Restaurant Association, in a release. "Restaurants are finding ways to adapt to the challenges of increased food costs and supply chain disruption. Restaurants have responded well to customers' desire to have more opportunities to enjoy restaurant meals, which continues to grow sales, create employment opportunities, and foster a strong sense of community."

Technology remains a wild card, as operators continue to strategize on how to best invest. Last year 48% of operators made technology investments, but 60% plan to make an investment in 2024. Customers cited said they would like to see technology that makes ordering and paying easier and more efficient.

One thing operators can be sure of is customers’ love of promotions. Seven in 10 adults said they look for daily specials and discounts when ordering. Eighty-five percent of customers said they are “more flexible about when they dine if it comes with a deal, and 84% said they'd take advantage of deals offered for dining at off-peak times.” Seventy-five percent of adults would even opt for smaller-sized portions if the price were lower.