In 2023, the restaurant sector is not only meeting the sales of pre-pandemic levels but is also going through a remarkable transformation.
Diners are again exploring new dining experiences with their family and friends and are spending late nights in their favorite pubs, restaurants, and bars.
Also, the restaurant industry is all about innovation this year. Owners are focused on making the dining experience better. They’re not just improving the in-house experience, but also making takeout and deliveries smooth.
As this industry is dynamic, knowing the latest restaurant trends and strategies is key. Let’s see what is going on in the market and what restaurant trends are going to drive the whole restaurant sector.
Restaurant Industry Market Analysis
Several restaurants are already seeing pre-pandemic levels in their sales and profits this year, recovering from all the losses that came with the challenging times of COVID.
However, higher ingredient costs are making it hard for restaurant owners to raise menu prices to cover their costs. It is a tough decision because some of them don’t want to put pressure on their price-sensitive customers.
Apart from menu prices, hiring and retaining good staff is a huge problem for the food industry.
Still overlooking all negatives, restaurants are looking forward to healthier options and ghost kitchens.
Now that you know the current market situation, let us go through top restaurant industry trends for 2024.
Related Restaurant Resources
Top 10 Emerging Restaurant Industry Trends
1. Restaurants recover from the pandemic
Before the COVID-19 pandemic, restaurants were thriving, enjoying consistent returns. Then, COVID hit, disrupting everything. It not only stopped people from dining out but also messed up the supply chain and affected other industries.
Still, 3 out of 4 restaurant owners believe that the restaurant industry is coming to normal in 2023. Diners are eager to eat out again and are pleased to catch up with friends, establish themselves as regulars, and try new dining experiences.
This year, various types of restaurants, from upscale fine dining to cozy cafes, have managed to get success. This is largely due to repeat customers who cover a significant amount of sales.
Recognizing this, there has been a consistent effort in the food sector to create a memorable customer experience, especially in on-premise dining.
Moreover, the integration of restaurant technology has played a significant role in this sector’s continued growth and success.
2. Kiosks are the new norm
After the pandemic, customers are getting more health-conscious and want their convenience first. This is the reason that self-service kiosks are getting popular in the restaurant industry.
Kiosk technology promotes both contactless payment and hassle-free ordering. They provide a better customer experience because one can take their sweet time while ordering and make their own customized order after going through all the options.
Restaurants also prefer these kiosks because they save money on servers & waiting time. Although, servers can focus on serving the food and being friendly.
Kiosks also collect data, which ultimately helps you to understand consumer behavior and help you set the meals accordingly.
Many restaurants like Taco Bell, McDonald’s, and KFC are already using kiosks. In fact, 76% of restaurants now use mobile payment, and 66% have tap-to-pay options.
3. Labor shortage—a huge concern for Restaurant operators
Apart from an inclusive or extravagant menu, friendly restaurant workers also matter when it comes to customer satisfaction. Therefore, you can not overlook staffing, but the labor shortages are increasing in the food and beverage industry.
According to the National Restaurant Association, even though jobs have been increasing for the past two years, restaurants and bars are still missing 450,000 jobs, which is 3.6% below the pre-pandemic. This is the largest job deficit compared to all other industries in the U.S.
Most restaurant owners feel that hiring staff for BOH (back of the house) is the most difficult. This back-of-the-house team includes chefs, kitchen managers, dishwashers, etc.
Some reasons for ongoing labor shortage are:
- High turnover
- Seasonal fluctuations
- Skill shortages
- Labor costs
- Competitions
- Training costs
To address these challenges, restaurants often need to invest in employee retention strategies, offer competitive compensation and benefits packages, streamline training processes, and create a positive & inclusive workplace culture.
4. Health-conscious dining is on the rise
According to Statista, half of the population of the United States is actively eating healthy. Customers are focusing on their health more nowadays, thus healthy dishes are on top of the food trends chart.
More and more individuals are searching for restaurants that provide nutritional value along with their dishes and healthier alternatives to popular dishes.
Not only about nutritional value, but people also have dietary preferences such as vegan, gluten-free, or vegetarian. Many restaurants recognize the importance of catering to these diverse needs, making it easier for people to find suitable and delicious options.
5. Ghost kitchens continue to open and grow
Ghost kitchens have become a game-changer in the food industry all across the United States. This innovative concept has gained momentum due to the continuous rise in real estate costs for traditional restaurants.
The beauty of a ghost kitchen lies in its cost-efficiency. Restaurant owners no longer have to fret about costly storefronts, hiring front-of-house staff, or arranging seating.
They can now establish their restaurants in less expensive areas, far from the busy city center, without losing any business opportunities.
Instead of relying on foot traffic, a ghost kitchen harnesses the power of digital marketing and prominent visibility on food delivery apps.
One can only get the food service from online ordering and through restaurant delivery in the ghost kitchen model. It is a win-win thing for both restaurants and customers.
Even though ghost kitchens rose to prominence during lockdowns, they are here to stay. They offer aspiring restaurant owners a low-risk way to test their cuisine before committing to a full-scale brick-and-mortar restaurant.
Moreover, the love for convenient, high-quality food delivery services is persistent, making ghost kitchens a thriving part of the food and beverage industry.
6. Menu prices increase across all Restaurants
An increase in menu price is a common occurrence. According to the National Restaurant Association, the overall upsurge in menu prices was 7.1% last year.
Some of the reasons for the price hike in restaurant menus are:
- Labor costs
- Supply chain disruption
- Food quality and sourcing
- Menu innovation
- Increase in restaurant operations costs and rent
- Economic conditions
- Consumer demand
- Rising costs of groceries and other ingredients
In conclusion, the general trend of rising menu prices in restaurants is a complicated phenomenon caused by economic, operational, and market factors. Still, restaurant owners prefer not to raise the prices much to maintain the price point of their restaurants.
Although the percentage of price hikes for food right now is lesser than what it used to be.
7. Online ordering and delivery has a booming market
More and more customers are using the Internet to order food and get it delivered to their places. In fact, it was forecasted that 40% of restaurant sales would be through online ordering in 2023.
The COVID-19 pandemic accelerated online ordering because many customers didn’t want to dine in restaurants to avoid the risk of getting sick. So, they turned to online delivery services to enjoy their favorite meals safely at home.
Once customers get that convenience, now it is no turning back. Many restaurants are providing food delivery, giving various options to customers to choose from.
If restaurants don’t have a website or app, then they are partnering with food delivery apps like Uber Eats. Thus, customers can choose convenience over anything, which includes food getting delivered to their doorstep.
8. Diners still value premium experiences
Diners still love the premium customer experience at full-service restaurants. Consumers prefer to get special services when they dine out.
In fact, 8 out of 10 millennials are willing to spend lavishly on a restaurant for some innovative experience.
These experiences can include things like top-notch services, beautiful ambiance or location, great food, unique food choices, or a variety of menu items.
So, whether you are a fast-casual restaurant or a fully established restaurant, focus on food delivery and dining arrangements.
9. Smaller menus and dynamic pricing to ensure profitability
As mentioned earlier, prices of ingredients and other groceries are increasing continuously due to supply chain disruptions & other factors.
To manage the above problems owners are going for smaller menus and making them focus on catering to specific tastes or customer preferences.
It helps them reduce the cost by minimizing the number of materials needed, resulting in a protected restaurant’s bottom line. In fact, nearly 24% of restaurants have reduced the items on their menu in 2023.
More restaurants are opting for smaller menus because, despite the price rise of ingredients, restaurants can not raise the prices of their dishes frequently. After all, customers are price-sensitive.
Apart from menu trends, you can keep dynamic pricing in mind. It involves adjusting the menu prices based on special events, seasons, holidays, peak dining hours, etc. Some restaurants use digital technology to implement the price change in the menu according to circumstances.
However, dynamic pricing is relatively a new concept in the market, which might take time to become popular.
Hence, restaurants are working to find the correct balance between rising costs and maintaining the price point of the menu.
10. Innovation in restaurant tech continues
Technology is everywhere; even local businesses know the importance of contactless payments and other technologies. Likewise, in the restaurant industry, technology is getting stronger and stronger.
People use technology not just for payments, but for ordering, delivery, table booking, and searching for full-service establishments or any other restaurants.
Technology is not restricted to customers only, even kitchen automation is there, which helps to keep track of ingredients. Apart from this, handheld tablets, POS systems, and QR menus are in use too.
Almost 63% of restaurateurs consider restaurant technologies such as gift card programs, digital ordering, POS systems, and online reservation systems most crucial for their business.
Innovation in restaurant tech continues because it makes dining easier, faster, and more personalized. Restaurants use technology to meet your preferences, and you can look forward to even more exciting tech changes in the restaurant industry over the years.
Conclusion
As a wrap-up, the food industry is adapting to new trends and is on the way to revival. Despite all the hurdles like supply chain disruption and labor shortages, it is pleasing that the industry is bouncing back.
Diners are eager to reconnect with their family and friends along with exploring new restaurants. Thus, follow the trends, make a solid business plan, and stay on top of the competition.
