WASHINGTON – The National Restaurant Association detailed the foodservice industry’s version of a “new normal” with the release of the 2023 State of the Restaurant Industry Report, an analysis of how the economy, labor, food and menu trends and operations impact the industry. The report states that 70% of operators said business conditions have settled into or are on the path to their new version of normal, setting up the industry for innovation and solid growth.

“The restaurant and foodservice industry is fueling the American economy,” said Michelle Korsmo, president and chief executive officer of the National Restaurant Association. “Our hiring rate and wage increases are outpacing the overall private sector, and this year our industry will contribute nearly $1 trillion to the economy. The 2023 State of the Restaurant Industry report offers an in-depth analysis of what’s driving this growth and the tremendous opportunities for restaurant owners, operators, and team members who want to grow their businesses and expand their careers.”

The association is forecasting foodservice industry sales to reach $997 billion in 2023, driven in part by higher menu prices. A majority of operators across all segments expect to keep their menus in 2023 similar in size to last year, according to the report.

Many operators were surveyed and 92% said the cost of food is a significant issue for their restaurant. In response, foodservice operators are adopting flexible approaches to ease higher expenses.

“With the rise of remote work blurring traditional meal times, operators are focusing on new opportunities to entice customers at all hours with engaging offerings, including off-hours or slow-day value deals, flexible pricing, multi-course meal bundles, meal kits and subscriptions, apparel, and more,” the report said. “Meanwhile, many operators plan to add to their menus more healthier and nutritious meal options, eco-friendly items, and dishes tailored to takeout in 2023.”

On the labor front, the foodservice industry workforce is projected to grow by 500,000 jobs, for total industry employment of 15.5 million workers by the end of 2023, according to the report. And between 2023 and 2030, the foodservice industry is projected to add an average of roughly 150,000 jobs a year, with total staffing levels projected to reach 16.5 million by 2030.

“Most restaurant operators will be actively looking to boost staffing levels in 2023, while carefully balancing staffing needs with business conditions,” the report stated. “Eighty-seven percent of operators say they’ll likely hire additional employees during the next 6–12 months if qualified applicants are available.”

Additionally, only 1 in 10 operators think recruiting and retaining employees will be easier in 2023 than it was in 2022. More than half of operators surveyed (58%) said technology and automation will become more common in their segment in 2023 although as a complement to human labor and not to replace workers.

The National Restaurant Association expects some “pandemic pivots” to become permanent. The association’s report found that temporary “pivots” such as expanded delivery services, outdoor dining options, to-go alcohol offerings and investments in technology currently are the foundation of the industry’s “new normal.”

“At least 4 in 10 operators in each of the three limited-service segments — quick-service, fast casual, and coffee and snack — believe the addition of drive-thru lanes will become more common in 2023,” the report said. “For others, outdoor dining and alcohol-to-go are becoming table stakes. Across all six major segments, more than 9 in 10 operators plan to continue offering outdoor seating and the same number of operators are also likely to continue offering alcohol-to-go, if their jurisdiction allows it.”

The restaurant industry is still far from becoming a tech-centric sector, although four in 10 operators said they plan to invest in equipment or technology to increase front- and back-of-the-house productivity. Other operational takeaways include:

• Among fine-dining restaurants that offered delivery during the pandemic, 79% added it for the first time; 80% of those plan to continue.
• Two-thirds of adults say they’re more likely to order takeout food from a restaurant than they were before the pandemic.
• Off-premises-only locations are expected to grow in popularity; more than 40% of limited-service operators think they will be more common this year.
• 69% of adults say they like the option to dine outside.

“As the restaurant industry adapts to a new normal, operators’ ability to be flexible and diversify their operations is essential to thriving,” said Hudson Riehle, senior vice president of Research for the National Restaurant Association. “With profitability under pressure, operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises business in order to satisfy customers in 2023.”