2024 Restaurant Outlook: A Year of Growth, Costs, and Winning Over Guests

In Resturant365’s just-released State of the Industry Survey, which covered some 5,500 locations, a clear paradox showed—but not an unfamiliar one. Operators are being hit with high-cost dynamics on multiple fronts, yet aware they need to deliver experience to justify how that’s being passed down to guests.

Of the more than 80 percent of respondents who said food costs rose over the p[past year, more than half said it was in the 1-5 percent range. Last year, respondents noted a 10 percent rise, while labor was roughly 9 percent. This year, of the 89 percent who noted labor costs expanded in 2023, north of half put it in the 1-5 percent window as well. So costs are still climbing, albeit at a slow pace.

“Restaurant operators continue to show resilience and creativity as they find new ways to move their restaurants forward,” Restaurant365 CEO and Co-founder Tony Smith said. “We’re seeing continued focus on the guest experience and a heavier focus on overall business operations. Expanding the use of integrated technology to drive efficiency, cost savings, and growth have propelled many restaurants throughout the year.”

Sixty-one percent of surveyed operators said they plan to take price in 2024. Again, an upward arrow but one that’s started to level out—it was 82 percent in 2023.

In the study, restaurants picked employee experience and retention as their most-pressing challenge for 2024 (38 percent agreed), followed by sales volume (24 percent), and labor costs (18 percent).