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By: Kerry Pipes | 1,306 Reads | 28 Shares |
Times are tough and nowhere is that more clear than with restaurant operators. According to the latest National Restaurant Association Business Conditions survey, the combination of higher food costs, labor costs, and energy/utility costs are now a significant challenge for a majority of operators.
“The restaurant industry is ending the year in an environment that’s the most typical since 2019,” said Hudson Riehle, senior vice president of Research for the National Restaurant Association. “Moderate but positive employment growth across the economy and elevated consumer spending in restaurants will allow the restaurant industry to kick off 2023 on a more optimistic note than the last few years, but operators remain braced for potential challenges in the new year.”
Food and labor costs make up approximately 33 cents of every dollar in restaurant sales.
- 92% of operators say food costs are a significant challenge
- 89% of operators say labor costs are a significant challenge
- 50% of operators expect to make less profit in 2023
Here are some actions operators are taking in an effort to shore up the bottom line:
- 87% of restaurants increased menu prices
- 59% changed the food and beverage items offered on the menu
- 48% reduced hours of operation on days open
- 32% closed on days that normally open
- 38% of operators say they postponed plans for expansion
- 13% of operators say they eliminated third-party delivery
- 19% postponed plans for new hiring
Elsewhere in the survey, a majority of full-service operators (63%) and limited-service operators (61%) say their restaurant does not have enough employees to meet customer demand. 87% say they will likely hire additional employees during the next 6-12 months, if there are qualified applicants available. But 57% of operators say they would be likely to lay off employees during the next 6-12 months if business conditions deteriorate and the U.S. economy enters a recession.
The National Restaurant Association Research Group conducted the survey of 3,000 restaurant operators in November 2022.