By RTN Staff - 12.19.2023
A new survey conducted by restaurant management software Restaurant365 gathers insights from restaurant operators across nearly 5,500 locations in the United States, spanning quick-service restaurants (QSR), fast-casual, casual dining, and fine dining establishments. The survey focused on the challenges and opportunities for the years 2023 and 2024, as well as investment plans in artificial intelligence (AI), marketing and sales, and workforce tools, programs, and benefits.
According to the survey, food and labor costs continued to rise in 2023, albeit at a slower pace than in previous years. Over 80% of respondents reported an increase in food costs, with more than half indicating a rise in the 1% to 5% range. This is a decrease from the previous year, where food costs were reported to have risen by about 10%. Similarly, labor costs also increased, with over 89% of respondents reporting a rise, and over half indicating an increase in the 1% to 5% range.
Despite these challenges, restaurant operators have shown resilience and creativity, focusing on enhancing the guest experience and improving overall business operations. Many have expanded their use of integrated technology to drive efficiency, cost savings, and growth.
Interestingly, the survey revealed a potential slowdown in menu price inflation. While 82% of respondents planned to increase prices in 2023, only 61% plan to do so in 2024.
Looking ahead to 2024, restaurant leaders are planning to invest across various aspects of their businesses to navigate the increasingly expensive operating landscape. The survey revealed that the most pressing challenge anticipated for 2024 is employee experience and retention, with over 38% of respondents ranking it first among six potential challenges. This was followed by sales volume (24%) and labor costs (18%).
To address these challenges, operators plan to invest in marketing technology, promotions, and loyalty programs. They also plan to enhance back-of-house efficiency and invest in salary increases and recruitment.
In terms of technology investment, nearly half of the respondents indicated that their priorities for 2024 include business intelligence and analytics. Other areas of investment include employee lifecycle software (36%), integrated accounting and reporting (34%), and various AI tools.
The survey also revealed that 41% of respondents plan to invest in AI sales forecasting and scheduling, 33% plan to implement AI-driven guest marketing, and 31% plan to use AI for inventory and purchasing.
In terms of physical expansion, the survey indicated a steady growth trajectory for 2024. While 60% of respondents planned to grow in the previous year’s survey, 57% indicated plans to grow in the coming year. Of these, 25% plan to open one location, 28% plan to open two to five locations, and 4% plan to open six or more locations.
Restaurant365’s annual State of the Industry Customer Survey makes clear: Despite the ongoing challenges of rising costs, the industry continues to show resilience and innovation, with a focus on enhancing the guest experience, improving operational efficiency, and investing in technology and workforce development.
