2023 Restaurant Forecast

By Rick Zambrano

Industry to grow as younger consumers optimistic

54% of Gen Z see their finances improving in 2023; 44% of all consumers not eating at restaurants as often as they would like

The restaurant industry, facing ongoing challenges due to global inflation and labor shortages, will grow its sales to $997B at eating and drinking places in 2023. The increase, which is partially due to higher menu prices, long overdue and will help offset cost increases on various fronts. This data, generated by the National Restaurant Association in its 2023 “State of the Restaurant Industry” report, affirms the challenges and several opportunities that restaurants have.

For one, 70% of operators say that business conditions have settled into a new reality postpandemic and a “new vision of normal.” The foodservice workforce in 2023 will grow by 500,000 jobs, for a total employment of 15.5M by the end of the year.

Consumers are looking for dining experiences. In fact, 84% of consumers say going out to a restaurant with family and friends is a better use of their spare time than cooking and cleaning up afterward.

Moreover, consumers are optimistic about the future, while being excited about potential experiences in the restaurant scene. A total of 54% of Gen Z and 51% of Millennials believe their finances will get better in 2023. Overall, more than 42% of all consumers feel their finances will get better. Only 32% of Baby Boomers feel the same way. In summary, younger consumers are more optimistic about their personal finances in 2023.

Restaurants represent an opportunity to try flavors cultivated and offered primarily within the four walls of a dining room. Not surprisingly, 78% of consumers say restaurants offer flavors and tastes sensations not easily replicated in the home kitchen. The experience is key: 78% of respondents indicated they would rather spend money on an experience such as a restaurant, than purchase a store item.

On a par with the 2022 results, this year, 44% of consumers indicate they are not eating at restaurants as often as they would like. By the same token, 36% of respondents indicated they are not ordering carryout or delivery as often as desired.

Restaurants that offer takeout, whether through carryout or delivery, are addressing pent-up consumer demand for restaurant food. Since December of 2021, according to “State of the Restaurant Industry,” the number of consumers who say they have not ordered takeout as often as they would like has hovered in the mid-30% range. However, from December 2021 to January 2023, the portion of consumers who have not been able to eat on-premises at a restaurant as often as they would like has declined from 51% to 44%, indicating preferences for off-premises dining are stabilizing, while on-premises occasions are still on the move.

Michelle Korsmo, president and chief executive of the National Restaurant Association, said, “The restaurant and foodservice industry is fueling the American economy. 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.”

Four in ten foodservice operators in the limited-service segments believe that drivethru lanes will become more common in 2023. On the other side of the spectrum, outdoor dining and alcohol-to-go are becoming must-haves for operators. The report finds that across all six major segments, more than 90% of operators plan to continue offering outdoor seating. And that same number will likely continue to offer alcohol-to-go options, provided their jurisdictions allow it.

Technology is an opportunity, but also a weak spot. According to the Association, “Despite widespread investment in technology in the last few years, the restaurant industry is still far from becoming a tech-centric sector.” As an example, most operators continue to see their use of technology as mainstream rather than leading edge.

To view the report, navigate to the Association’s download page