Extra Than 50% of Eating places Noticed Earnings Lower This Yr: Report
The restaurant industry is perhaps doing better now than it was over the past few years, but that doesn’t translate into overwhelming success.
Most restaurants saw lower profits this year than in 2022, according to a new report from the James Beard Foundation. The group’s annual Industry Report is a temperature check for the culinary world, and this year it received input from more than 250 chefs in 44 states. While they had a lot of good things to say about restaurants in 2023, there’s still a ways to go toward stability.
“While we are encouraged to see the beginning of a return to pre-pandemic dining trends, we recognize the many headwinds restaurant owners and operators continue to face,” Clare Reichenbach, the CEO of the James Beard Foundation, said in a statement.
Drooping profits were in large part due to the rising costs of food and labor, as well as inconsistent consumer behavior. According to the report, 52 percent of respondents increased wages 10 to 25 percent over the past year, while just 16 percent didn’t raise wages at all. And while a healthy 36 percent of restaurants saw their number of customers rise compared with 2019, an almost equivalent 37 percent saw fewer customers this year.
Despite that, some 67 percent of restaurants said that 2023 was a good or average year, and 51 percent said it was better than 2019, before the pandemic began. Just 23 percent of respondents called 2023 a bad or terrible year, and 31 percent said it was worse than 2019. Plus, nearly half of restaurants said they had higher check averages this year (even though that’s probably in part due to increased menu prices, with 72 percent saying they raised prices 10 to 25 percent over the past year).
In the face of these up-and-down trends, those in the industry remain optimistic about the year ahead. The James Beard Foundation attributes that rosy outlook to a number of factors, including distance from the pandemic and restaurant shutdowns, customers’ increased knowledge about the restaurant and food industries, and a push to make restaurants and kitchens a better working environment.
“I’m hopeful that 2024 brings about more encouragement to support local, small businesses and restaurants again,” one chef told the organization. “There is always a need for people in the food industry to contribute to culture, history, and community,” said another.
While inflation—among other things—will continue to be a factor in both how restaurants operate and how diners spend their money, that optimism about the importance of a good meal is much needed, serving as a reminder for why we go out to eat in the first place.
Source: Robb Report
