Restaurant Industry Expected to Pass 1 Trillion Dollars in 2024

The National Restaurant Association has just unveiled its highly anticipated annual State of the Industry report, and the headline is nothing short of remarkable: the association forecasts that the restaurant industry will surpass $1.1 trillion in sales in 2024, marking a historic milestone. If this projection materializes, it will be the first time that sales from the nation’s second-largest private industry cross the trillion-dollar mark. 

The trajectory of growth in the foodservice industry over the past four years has been nothing short of staggering, even in the face of unprecedented challenges such as the global pandemic. Last year's forecast hovered around $997 billion, while the pre-pandemic projection from 2019 was approximately $863 billion. This exponential growth underscores the resilience and adaptability of the restaurant sector. 

One driving force behind this growth has been pricing strategies. Menu prices experienced a significant 8.8% year-over-year increase in March 2023, though they have since stabilized, standing at a 5.2% increase in December of the same year. However, it's not just pricing that's fueling demand; consumer preferences, particularly among younger demographics, play a significant role. A whopping 52% of consumers, including 67% of millennials and 63% of Gen Z adults, view ordering takeout from restaurants as an essential part of their lifestyle. 

Despite the optimism surrounding the trillion-dollar milestone, it's essential to recognize that the industry still has room for growth. In 2023, there were just over 631,500 restaurants, compared to over 703,000 in 2019, indicating a notable gap. Hudson Riehle, SVP of the association’s research and knowledge group, emphasizes the industry's increasing economic importance, with restaurants commanding a significant share of consumer spending over the decades. 

The workforce landscape within the restaurant industry is also evolving. With record-high sales projected for 2024, the industry is expected to employ a record-high 15.7 million people. However, this growth is not without its challenges. Forty-five percent of restaurant operators report a need for more employees to meet consumer demand, with 70% facing difficulties in filling job openings. Despite these hurdles, the industry aims to add an average of 150,000 jobs per year for the next eight years, with total staffing levels expected to reach 16.9 million by 2032. 

In response to shifting consumer preferences and operational needs, technology has emerged as a key investment priority for restaurant operators in 2024. A staggering 60% of operators plan to make technology investments this year, up from 48% in 2023. For younger consumers, the ability to order and pay quickly and seamlessly is paramount, along with access to loyalty programs for enhanced value opportunities. While technology and automation may alleviate some labor shortages, operators emphasize their intention to augment rather than replace human workers. 

Looking ahead, Riehle remains optimistic about the industry's prospects, foreseeing solid and consistent growth in the long term. Despite the challenges of the past four years, consumer spending on restaurant meals, snacks, and beverages continues to prioritize dining out, reflecting the enduring appeal of the restaurant experience in the American lifestyle. As the industry continues to evolve and innovate, its resilience remains a testament to its enduring importance in the national economy. 

Source: National Restaurant Association / Nation’s Restaurant News