Last year, our annual State of Restaurants Report examined the immediate fallout from the pandemic. We found that while there were some signs of recovery, many operators were still contending with the impact of a global event that has fundamentally altered the way they run their businesses.
After more than a year of navigating this new industry landscape and adapting to changing consumer behaviors, we set out to find out how full service operators are faring. There’s no question that this past year came with its own set of challenges and our 2023 State of Restaurants Report examines not only what has changed, but also what obstacles and opportunities lie ahead.
To compile our 2023 State of Restaurants Report, we surveyed more than 600 full service restaurant owners, presidents, CEOs, general managers, and area managers from across the U.S. We then compared our restaurant research to the data collected for our 2022 State of Restaurants Report to identify what changed, anticipate upcoming restaurant trends, and help operators find solutions for the challenges they’re facing.
We also took an even deeper dive at the state of full service restaurants in New York City, Los Angeles, Chicago, Dallas, and Houston to see how these changes are playing out in some of the country’s largest urban areas.
Inside our brand-new 2023 State of Restaurants Report, you’ll find…
- 100+ industry insights from restaurateurs across the U.S.
- An analysis of the top five restaurant industry trends for 2023
- First-hand accounts from real restaurant owners
- Tools and strategies for restaurant recovery
Keep scrolling for a sneak peek at some of our key findings and a preview of the top restaurant industry trends for 2023. For a complete picture of the changing restaurant landscape, download the restaurant industry report now.
Key Findings from the State of Restaurants Report
While 2022 was largely absent of pandemic-related dining restrictions, recovery continues to be a mixed story for many in the restaurant industry. Some operators – especially those with larger venues – have seen sales fully bounce back to pre-pandemic levels. On the other hand, some operators have found the past year to be slow at best and a challenge at worst, largely due to inflation and ongoing supply chain issues.
Here’s what our 2023 restaurant industry report uncovered.
Sales Slowly Recovering
Restaurants saw their sales take a major hit during the pandemic and it’s only now that most operators say they are close to where they were pre-pandemic. On average, operators say their sales have returned to about 75% of pre-pandemic volume.
However, due to the rising cost of food and other expenses, profit margins stayed relatively steady for full service restaurants at 10.6%, with the exception of larger restaurants – specifically those with 120 seats or more – which reported seeing profit margins as high as 13%.
Menu Prices on the Rise
With inflation high and food prices in a constant state of flux, there’s no question that operators today are paying much more for inventory than in the past. In fact, 50% of operators reported that all or most of their suppliers raised prices in the past year and, overall, the average expenditure on food increased by a whopping 43% in the past year alone.
With the majority of suppliers raising their prices, it’s no surprise that 44% of restaurateurs reported that rising food costs and inflation has been their biggest inventory challenge this year. In response, 53% of restaurateurs reported raising their menu prices in the past six months. For the most part, these menu price increases have been relatively modest, with the average increase being 15% – a change that does not appear to have significantly impacted consumers’ dining decisions. In fact, these price increases are largely in line with the maximum increase most consumers are willing to absorb.
Online Ordering Usage Remains Steady
Perhaps one of the biggest differences from last year’s restaurant industry report has been the role of takeout and delivery. Dining room traffic is up and it’s clear that the pandemic-induced takeout boom has somewhat subsided.
However, our latest restaurant research reveals that a significant number of restaurants still report using online ordering platforms to support their takeout and delivery business. In fact, 49% of restaurateurs said they use at least one or two online ordering platforms, while 41% of restaurateurs said they use three to four platforms. On average, most restaurants report using three online ordering platforms.
To maximize these gains, most operators are leveraging the exposure of third-party platforms, while enjoying the low-commission fees that come with direct online ordering. Overall, this has led to operators seeing a 17% average increase in sales from online ordering.
Restaurant Trends for 2023
While the restaurant industry continues to face significant challenges – especially in the midst of an increasingly unstable economy – there are several promising restaurant trends to keep an eye on in 2023. Below is a sneak peek at some of the top restaurant industry trends identified in our report and a glimpse at what the future of restaurants might look like.
Built-In Menu Flexibility
In addition to rising costs, restaurateurs also continue to deal with major supply chain disruptions and shortages. In fact, one-in-five operators (20%) said that ingredient shortages was their number one inventory challenge this year, revealing just how dire the situation has become.
In response, many operators have learned to be more flexible when it comes to their menus and specials. Whether it’s switching suppliers, sourcing ingredients locally, finding substitutes for certain ingredients, or adjusting portion sizes, it’s essential for operators to look for opportunities to build more flexibility into their menus so they can better adapt to ongoing ingredient shortages.
The TikTok Turning Point
When it comes to social media, Facebook is still the number one platform for restaurateurs. However, TikTok is quickly becoming the app of choice for many operators, with 40% saying they currently use the social media platform to promote their restaurants. In some cities, TikTok has even overtaken Instagram as the preferred app of choice.
Though it may be easy to dismiss TikTok as a fleeting social media trend, there are many signs that the platform is here to stay. A number of operators reported seeing customers coming in after watching a video on TikTok and studies show that TikTok has actually replaced Google as the search engine of choice for Gen Zers. For example, Pietro Nolita – one of the 10 best restaurants in NYC – experienced this with its “pink interior”, which helped them go viral on the platform. Though the platform is still relatively new, it’s clear that TikTok is worth investing in if operators want to continue attracting new diners.
To explore further restaurant research get more restaurant industry trends for 2023, and better understand the future of restaurants, download the full 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.