The trifecta of skyrocketing food, labor, and energy prices are some of the consequences and challenges that are suffering food service operators despite the increase in total annual sales in U.S. restaurants in January.
Higher food, labor, and energy costs now represent a major challenge for most restaurant operators, according to the NRA’s Business Conditions Survey, released in January. A large majority (93%) of operators say their restaurant’s total food costs are higher than they were in 2019.
Although, the U.S. food service industry is expected to grow this year. Due to strong demand and customers continued inclined to pay higher prices, according to the NRA in its 2023 State of the Restaurant Industry report.
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U.S. restaurant sales jumped significantly in January, about 24%. This means $95.5 billion (€90 billion) on a seasonally adjusted basis, according to preliminary data from the U.S. Census Bureau. The figure is also higher than November and December 2022, which recorded sales of roughly $89 billion (€84 billion), reported by the National Restaurant Association.
Results from the NRA’s survey show that 84% of U.S. consumers believe that going out to a restaurant with family and friends is a better way to spend their spare time than cooking and cleaning. Moreover, 44% report that they do not dine out as often as they would like and 36% do not order takeout as often as they would like.
The NRA expects total U.S. restaurant sales to reach $997 billion (€940 billion) by 2023, driven in part by increasing menu prices. As well, the restaurant industry workforce is projected to rise by 500,000 jobs, accounting for about 15.5 million jobs countrywide at the end of 2023.
NRA Economist Bruce Grindy said, “healthy household balance sheets, a buoyant labor market, and moderating inflation will give consumers the wherewithal to continue burning off the pent-up demand that they accumulated during the pandemic.” Finally, it remains to be seen how expectations will play out in 2023.