After a tumultuous few years, Los Angeles restaurants are once again seeing full dining rooms and bustling patios. But despite rising sales, operators in Los Angeles are still contending with major challenges, such as inflation and an ongoing staffing shortage. To help restaurateurs understand these new challenges and plan for the future, we’ve put together an extensive report on the biggest Los Angeles restaurant trends for 2023.
To create our LA restaurant report, we surveyed restaurant owners, CEOs, general managers, and area managers from across the city. We also interviewed local restaurateurs to get a better idea of the personal stories behind the numbers.
Inside our 2023 Los Angeles State of Restaurants Report, you’ll find…
- Dozens of stats and industry insights
- First-hand accounts from real restaurant owners in LA
- Tools, technology, and strategies for navigating ongoing challenges
Continue reading for a preview of our findings and further insight into the top Los Angeles restaurant trends for 2023. You can also download the full 2023 Los Angeles State of Restaurants Report for a deeper dive into the LA restaurant trends listed below.
Los Angeles Restaurant Trends 2023
2022 was a year of recovery for Los Angeles restaurants with operators reporting that, on average, sales volume returned to 77% of pre-pandemic levels.
Unfortunately, some of these recovery efforts have been stymied by rising operating costs. In fact, the average profit margin for Los Angeles restaurants dropped to 9.4% in 2022, which is below the national average of 10.6%. Much of this drop can be attributed to rising inventory costs, which 55% of Los Angeles restaurant operators said was their number one source of financial strain.
With ongoing inventory challenges in mind, our LA restaurant report looked at some of the top challenges and opportunities for the city’s operators. Here are three of the top Los Angeles restaurant trends to watch in 2023.
Prioritizing Recruitment & Retention
Back in 2019, our LA restaurant report found that about 69% of the city’s operators were facing regular staffing shortages. In 2022, a whopping 95% of Los Angeles’ restaurateurs say they are short at least one position and, on average, most are short about six positions. Back of House roles appear to be the hardest to fill with 36% of the city’s operators saying they are short on line cooks and 33% saying they are short prep cooks.
The ongoing staffing shortage in LA may be partially due to the fact that the city’s restaurant staff turnover rate has climbed from 24% to 27%. This figure is not only concerning from an operational perspective, but it’s also incredibly costly. Our report found that it now costs $4,414 on average to train a new restaurant employee in Los Angeles, meaning each new hire needed puts a major dent in an operator’s bottom line.
With the staffing crisis becoming increasingly hard to ignore, recruitment and retention will be one of the biggest LA restaurant trends for 2023.
Strategic Menu Price Increases
Like many restaurateurs across the U.S., operators in Los Angeles have been fighting an ongoing battle against higher food costs. In fact, our LA restaurant report found that the city’s operators reported spending 50% more on food costs this year than the year prior. This increase is unsurprising given that 65% said that all or most of their vendors increased prices in the past year.
In LA, one of the most popular ways to combat rising food costs has been to increase menu prices. In fact, 74% of Los Angeles restaurateurs reported raising their menu prices in the past 6 months. On average, the city’s operators reported raising prices by 15.6%, which is in line with the national average.
Of course, consumers will only tolerate so many price hikes. In 2023, LA’s operators will have to be careful to keep price increases to a minimum where possible to avoid giving diners a serious case of sticker shock and driving business away.
Shifting to Direct Online Ordering
During the height of the pandemic, takeout and delivery apps became an essential revenue driver. However, now that takeout and delivery volume has returned to more reasonable levels, many restaurants – especially those in LA – are starting to look for a more economical alternative to third-party apps. And for many operators, direct online ordering platforms have become the go-to solution.
Back in 2021, a whopping 59% of LA restaurants reported using Uber Eats, while just 22% offered direct online ordering. In 2022, the split is much more even, with 50% using Uber Eats and 48% now offering direct online ordering.
With operators in Los Angeles doing nearly a quarter (24%) of their total business through online ordering, the ongoing switch to commission-free solutions like direct online ordering is sure to be one of the biggest LA restaurant trends.
Get the top trends and insights with our 2023 restaurant industry report.
To get even more Los Angeles restaurant trends for 2023 download the full 2023 Los Angeles State of Restaurants Report.
Wondering how restaurants in Los Angeles compare to their peers across the U.S.? Download the complete 2023 State of Restaurants Report.
This study was conducted by research firm Maru Matchbox on behalf of TouchBistro in September 2022.
More than 600 full service restaurant owners, presidents, and area/general managers were surveyed across all 50 states, with an added focus on six key cities: New York City, Los Angeles, Chicago, Dallas, Houston, and Miami. Survey results are accurate +/- 4% 19 times out of 20. The detailed findings on this research by Maru Public Opinion are available at: Maru Public Opinion US.
