Restaurants bullish on expansion in 2024
Despite economic uncertainty and high interest rates, 2024 is looking like a year of growth for full-service restaurants.
Nearly all (94%) of restaurant operators have some sort of expansion plans for 2024, suggesting that most full service operators are optimistic about the year ahead, according to a survey of 600 U.S. full-service restaurant owners, CEOs, general managers and area managers by restaurant management system TouchBistro.
The plans include opening new locations: Forty-three percent of restaurateurs plan to add a new location in the coming year, and 44% are planning to add multiple new locations. In other expansion, 54% plan to add catering services, tapping into growing demand from the return to the office and in-person events.
Respondents rated inventory costs as their top (58%) concern. Sixty percent of operators reported that all or most of their suppliers have raised prices in the past year, with the average expenditure on food increasing by a whopping 41% in the past year alone.
Other findings from TouchBistro’s 2024 State of Restaurants Report are below.
•Menu prices reflect inventory costs: In response to rising inventory costs, 67% of restaurateurs raised their menu prices in the past six months, with increases slightly smaller than the previous year. In 2023, operators reported raising menu prices by an average of 13%, which is a drop from the average price increase of 15% in 2022.
•Staff turnover rates remain high: Roughly 82% say they were short at least one position, an improvement from last year when 97% said the same. However, turnover rates remain unchanged from last year at 28% for all full-service restaurants and 34% for those with five or more locations.
•Commission fees still eating into profits: Forty-six 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%) actually report paying more than 20% in commission fees on each order.
•The role of automation: Operators noted that productivity has become the number one priority for saving on labor costs. Forty-five percent said their goal is to increase productivity, over 10% higher than last year (34%, and automation is key to this goal.
•AI becomes mainstream: A whopping 89% of operators surveyed are already using AI in their restaurants in some way. The top three ways operators are using AI are through digital assistants (35%), AI chatbots (34%) and predictive analytics/reporting (31%). While these applications of AI may not be apparent to most consumers, restaurateurs are already reaping the benefits of these tools behind the scenes.
“The true benefit of technology for the restaurant industry is that it allows people to focus their time and energy on growing their business, rather than being burdened by paperwork,” said Samir Zabaneh, chairman and CEO of TouchBistro. "In our research, we found that almost three-quarters (72%) of operators have automated online ordering, 70% have automated payroll, and 67% have automated invoicing – all everyday tasks that can significantly slow down operations when done manually.”