U.S. Restaurant Industry Expected to Pass $1 Trillion
For the first time. The National Restaurant Association is forecasting a record $1.1 trillion in sales in 2024 and the addition of 15.7 million jobs. The National Restaurant Association released its annual State of the Industry report today with the sales forecast as its top headline; the association expects to exceed $1.1 trillion in 2024. Should this forecast play out, it will mark the first time sales from the nation’s second-largest private industry will tip into the trillions. Last year, the foodservice industry forecast was $997 billion, while the pre-pandemic forecast from 2019 was about $863 billion, illustrating a staggering growth trajectory throughout the past four years despite a global black swan event. Of course, much of these sales have been driven largely by pricing; menu prices peaked at an 8.8% year-over-year increase in March 2023, but have since started to cool a bit and were 5.2% higher in December. Still, demand for restaurants has also proven to be quite high, particularly among younger consumers. Fifty-two percent – including 67% of millennials and 63% of Gen Z adults – say ordering takeout from a restaurant is an “essential part of their lifestyle,” meaning pricing isn’t the only driver here. Notably, the trillion-dollar breakthrough is a cause for optimism given that the industry remains much smaller than it was in 2019. According to Technomic Ignite data, there were just over 631,500 restaurants in 2023 versus just over 703,000 in 2019. “Looking at the operating environment for the upcoming year, it is one where there is an overall moderation in industry growth, but the milestone of passing $1 trillion is truly astounding when you consider that is over $3 billion a day on average and $125 million an hour,” Hudson Riehle, SVP of the association’s research and knowledge group, said during a recent interview. “As decades have passed and consumers continue to shift their food spending toward away-from-home solutions, the industry continues to not only garner consumer support but also increase in its economic size and importance.”
7 Tech Takeaways from the National Restaurant Association’s Annual Forecast
Restaurants will add more technology in 2024. Think technology is a big topic in restaurants right now? The National Restaurant Association’s annual State of the Restaurant Industry report, published Tuesday, devotes 14 of its 60 pages to tech and concludes that it will continue to play a major role in restaurants this year. Here are seven key takeaways from the data, which comes from surveys of operators and consumers. Restaurants race ahead with tech. Restaurants looking to run more efficiently and win favor with customers are continuing to embrace tech. In general, more operators plan to invest in technology in 2024 than last year, especially in products designed to improve the customer experience (60%) and make the kitchen more efficient (52%). Consumers, however, have mixed feelings on tech in their dining experience. A third of all adults actually said they want less tech in full-service restaurants, while 27% said the same of quick-service restaurants. The responses varied significantly by age group, though: Almost half (48%) of millennials, for instance, want more tech in FSRs, and 40% of Gen Z said the same of QSRs. And a good chunk of people (about 38%) just want restaurants’ level of technology to stay the same. Operators should know their audience before deciding how to spend their tech budget, because different customers expect different things.
Bielat Santore & Company – Restaurant Industry Alert
BIELAT SANTORE & COMPANY SELLS INDUSTRIAL PARK IN ABERDEEN, NEW JERSEY
“OUTSIDE THE BOX”
“When an attorney that we had conducted business with on hospitality related real estate, called following the closing of a transaction we worked on together in December and said, I want to refer a client of mine who wants to sell her property to you. I was all ears, states Richard Santore of Bielat Santore & Company, Allenhurst, Monmouth County, New Jersey. I was certain he was going to say it is a restaurant or a bar or a banquet facility. Instead, he said, she owns a six-acre industrial park on Lloyd Road in Aberdeen, New Jersey. No problem, I will call her,” continues Santore.
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Theatrical Cocktails Brings Guests Back to Restaurants
Mixing innovation with entertainment. It’s no secret that having a thoughtful, carefully curated cocktail menu can greatly enhance the restaurant dining experience. Lately, many restaurants are kicking it up a notch and creating over-the-top, show-stopping cocktails that not only offer a delicious drink, but an element of entertainment, interaction, or surprise. At Bourbon Steak Nashville, the most popular cocktail is an engaging spectacle for guests: a tableside smoked Old Fashioned. This distinctive offering was crafted to add an element of novelty to the menu. The decision to present this classic cocktail in a fresh, interactive manner stems from the restaurant’s emphasis on bourbon and the Old Fashioned’s status as the favorite cocktail among patrons. And this one brings the bar experience directly to the diners with the cocktail prepared tableside and then smoked live, says AJ Johnston, general manager at Bourbon Steak Nashville. “It’s the interaction,” Johnston explains. “The ability to entertain the guest not only visually, but talk through what the process is, what makes it unique, flavor profiles, textures.” The experience allows knowledgeable bartenders to talk about bourbon and also explain the preparation process; the cocktail is fat washed with trimmed fat from A5 Wagyu steaks. Johnston says this adds a smokey, beefy, juicy element to the Old Fashioned. A5 Fat Washed Blanton’s Bourbon is combined with sugar and Angostura bitters, then smoked with hickory smoke. Johnston notes that this educational aspect, combined with the enjoyment it brings, adds a layer of value to the experience (the cocktail is priced at $45). Guests benefit from the additional experience of engaging with the mixologist, rather than merely having a drink placed before them. The establishment also features other dynamic tableside cocktails, like a single-barrel Mint Julep accompanied by flamed cinnamon, or a Manhattan enhanced with a flaming orange zest.
California’s New Fast-Food Wage Law to Bring Major Impact Industrywide
Price hikes are likely to be passed down to the consumer. In California, AB 1228—which will raise the minimum wage for quick-service employees with 60-plus units to $20 an hour starting in April—is triggering several reactions from restaurants across the state. Since the current minimum wage is $16 an hour, that’s a 25 percent rise. It will likely lead to most concepts lifting prices to keep pace with rising labor costs. But it also could yield several benefits, including helping restaurants recruit more staff and boost morale. Therefore, AB1228 is going to shake up California’s fast-food industry, which recently came out of the pandemic and is already contending with rising food expenses. The law will affect over 500,000 fast-food workers across the state. The Service Employees International Union (seiu), which represents them, issued a statement that said AB1228 will lead to “fairer wages, healthier working conditions, and better training.” It also has components of paid sick leave and paid vacations. Mary Jane Riva, CEO of Pizza Factory, which has 109 locations, all franchised except for one, with 72 based in California, acknowledges that when the law passed, franchisees “were panicked. How are we going to pay for that? How can we keep our guests coming in when we’re going to have to raise prices?” they wondered. Yet when they simmered down, most came to realize that Pizza Factory was a “legacy brand and have relationships with our customers” that won’t be denied because of a price increase, she says.
Revolutionizing Restaurant Operations
With advanced networking solutions. The restaurant industry is transforming significantly, driven by changing consumer preferences, technological advancements, and a competitive market landscape. Restaurants are no longer just about the food – they are about the complete dining experience, which includes ambiance, service speed, and personalized interaction. The need for innovation and efficiency has never been greater in this evolving scenario. Advanced networking solutions have emerged as a critical player in this revolution, offering the potential to enhance restaurant operations dramatically. These technologies promise to streamline processes, improve customer service, and provide a competitive edge in an increasingly digital world. Today’s restaurants face many challenges that impact their ability to provide exceptional service and maintain operational efficiency. Customers expect quick, seamless service and personalized experiences. Meanwhile, restaurants must effectively manage inventory, staff, and customer data. Traditional methods, often manual and time-consuming, are increasingly unable to meet these demands. They need to gain the speed, accuracy, and flexibility that modern restaurants require to thrive. As a result, many establishments struggle with slow service times, inefficient inventory management, and inadequate customer engagement — all of which can lead to decreased satisfaction and lost business. With their ability to connect various facets of restaurant operations and provide real-time data and insights, networking solutions present a powerful tool for overcoming these challenges and setting a new standard for efficiency and customer service in the industry.
Optimizing Restaurant Operations
With modernized tech solutions. Investing in these technologies is a strategic move toward future-proofing your business. The restaurant industry is experiencing a dynamic shift, driven by evolving consumer preferences and technological advancements. Today’s consumers expect not just quality food but also speed, convenience, and a seamless dining experience. In this fast-paced environment, traditional operational methods are being reevaluated, paving the way for more innovative approaches. One such approach is the adoption of advanced networking solutions, which have the potential to revolutionize quick-service operations. These technologies are not just about staying current; they’re about redefining efficiency and customer service in an industry known for its fast-paced nature. Embracing advanced networking solutions could be the key to staying competitive and meeting the ever-growing demands of customers in the quick-service sector. In the world of quick service, customer expectations for speed and convenience are at an all-time high. The fast-food industry, historically known for its quick service, is under increasing pressure to deliver even faster with more efficient service. Customers now expect rapid order fulfillment, minimal wait times, and a hassle-free dining experience, whether they are ordering in-store, through a drive-thru, or via a delivery service. However, meeting these demands poses significant operational challenges for quick-service restaurants. Efficiently managing high-volume orders, maintaining food quality, and ensuring customer satisfaction requires a delicate balance and a rethinking of traditional operational models. The ability to adapt to these customer expectations is crucial for the survival and growth of quick-service restaurants in a highly competitive market.
Super Bowl and Valentine’s Day 2024 Edition
Pizza predictions, Valentine’s Day menu trends and lots about loyalty. HungerRush released the results of a national dining survey on 2024 pizza ordering predictions for The Big Game (February 11) and National Pizza Day (February 9). The data revealed an overwhelming 72 percent of diners plan on ordering pizza this year on either The Big Game, National Pizza Day, or both. Highlights of The Big Game and National Pizza Day Ordering Predictions: 32 percent of diners say they plan to order from a local chain or independent pizzeria instead of a big chain—revealing the opportunity for small and mid-sized pizza restaurants to double down on marketing efforts for The Big Game and National Pizza Day. 56 percent of diners said overall quality and taste matter most when choosing a restaurant to order pizza from. However, the best available coupon and fastest delivery time tied in second place. Offering special Big Game Day and National Pizza Day coupons that highlight speedy delivery and quality ahead of time can help restaurant owners maximize orders. Normally, 42 percent of diners expect their pizza to arrive within 30 minutes. For busy pizza days like The Big Game and National Pizza Day, the expectation eases a bit. For example, during The Big Game, 33 percent of Millennials and 31 percent of Gen X expect their pizza delivery to arrive within 45 minutes. What are the three most popular types of pizza they plan to order? The top winners are pepperoni (63 percent), cheese (56 percent), and meat lovers (51 percent). If you’re a pizza restaurant, plan on stocking up so you don’t run out of key ingredients in the rush! Overall, 43 percent of diners surveyed say they make somewhat complex to very complex changes to their pizza orders. This means managing order complexity is crucial for pizza restaurants. A failure to handle complex orders with speed and accuracy can damage the customer experience for almost half of customers and lead to lost business.
Did You Know?
Why success in controlling labor is about shaving minutes, not cutting servers. Your servers are your salespeople. I don’t care what others say but I have never in my career seen a restaurant cut servers and grow sales. From a perspective focused on creating sales short term (for that day), cutting servers does not make sense. Cutting servers does not allow the servers enough time with their tables to increase their ability to sell. If they are running around busy, the server doesn’t have time to tell the guest about the menu or answer questions or make recommendations.
Employee Tip
Restaurant operators see gig work as labor solution. The restaurant industry is projected to grow employment by about 1.1 million positions between the end of 2023 and 2032. While employment is likely to grow, finding staff is still a significant challenge for many operators, with 45% of surveyed restaurateurs reporting inadequate staffing to meet extant consumer demand. About a quarter of surveyed operators reported that they would consider using “gig workers,” or independent contractors supplied by a third-party service, to supplement existing staff.
