Serving Up Data: Restaurant Industry Statistics

Restaurants involve so much more than the art of cooking and the pleasure of eating. Successful small business owners in the bustling sector must understand restaurant industry statistics and trends to forecast and plan for business performance, identifying potential growth areas and crafting effective strategies.

We’ve done the research to dish out a healthy serving of key data points, highlighting essential statistics ranging from market size and customer demographics to workforce trends and consumer behavior. Understanding these figures helps restauranteurs navigate the highly competitive landscape and make data-driven decisions that determine success.

Join us as we slice and dice through the numbers, delivering insights as fresh as your kitchen’s daily specials. Let’s turn the heat up on your restaurant’s data savviness!

The Restaurant Industry: An Overview

The restaurant industry, a vital pillar of the hospitality sector, encompasses establishments that provide food and drink services to customers. With its crucial role in employment and contribution to the global economy, food service is a dynamic and vibrant field that significantly influences today’s economic landscape.

Defining the Restaurant Industry

The restaurant industry is a broad sector within the greater hospitality industry that includes any businesses primarily engaged in the preparation and serving of meals and beverages to customers. These establishments range from small-scale eateries like cafes and diners to larger operations like fine dining restaurants, fast food franchises and caterers.

Restaurant services are offered through various models, including dine-in, take-out, delivery, drive-thru, or a combination of options. The restaurant industry’s role, however, entails more than merely fulfilling the basic need for food. It also involves providing a dining experience, whether casual or upscale.

The restaurant sector remains a significant player in the global economy, contributing to job creation and revenue generation while fostering cultural diversity through culinary experiences.

The Role and Importance of the Restaurant Industry

The restaurant industry is vital in the current economic landscape, contributing significantly to employment and gross domestic product across nations. Restaurants offer a wide variety of job opportunities, from entry-level positions to executive roles, directly impacting local and national employment rates. According to the National Restaurant Association, the industry now employs more than 15 million people in the United States alone.

Besides job creation, restaurants also generate substantial tax revenue and stimulate economic growth in related industries, including agriculture, food production, restaurant equipment, and real estate. Likewise, the industry plays an essential role within the tourism sector, significantly contributing to the appeal and uniqueness of travel destinations.

Amid the evolution of consumer behaviors and digital advancements, restaurants also have become key players in the expanding online food delivery market, fostering innovation and new business models.

Restaurant Statistics: A Deep Dive

When we delved into the meat of the matter—key restaurant statistics—We uncovered data patterns and trends that shape this dynamic industry’s growth and evolution.

• According to the National Restaurant Association, the food service industry is forecast to reach $997 billion in 2023 sales due in part to higher menu prices.
• The same report from the National Restaurant Association found that 84% of consumers say dining at a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up at home.
• Restaurants are more popular than even the most avid diner might imagine. An impressive 45% of restaurant customers go out to eat multiple times a week, while another 20% dine out once a week, according to a Toast Restaurant Success Report.
• Restaurants operate on slim profit margins. The average restaurant’s annual revenue falls around $1 million, but it generates an operating profit of just 4-5%. The most profitable types of restaurants can generate slightly higher margins.

Restaurant Economy Statistics and Trends

• Additional research from the National Restaurant Association found that nine of every ten restaurants in the United States have fewer than 50 employees.
• The restaurant sector continues to mirror the seasonality of the overall hospitality industry. For example, restaurants are expected to add 502,000 seasonal jobs during the summer of 2023, according to the National Restaurant Association’s 25th annual Eating and Drinking Place Summer Employment Forecast.  This represents the highest level of summertime hiring since 2017.
• Between 2021 and 2023, the restaurant industry added more than 2.5 million jobs and ranked as the U.S. economy’s top job creator, surpassing the professional and business services sector.

Challenges and Opportunities in the Restaurant Industry

• According to the National Restaurant Association’s 2023 State of the Restaurant Industry report, 92% of operators say the cost of food is a significant issue for their restaurants. Labor costs also were a concern for 89% of operators.
• The same report found that In 2023, 47% of restaurant operators expect competition to be more intense than last year. Half of the restaurant owners also expect to make less profit in 2023.
• In the Toast report, restaurateurs’ top challenges were high operating and food costs, hiring staff and training staff, including 52% who cited high operating and food costs as their greatest challenge.
• Amid declining profit margins, automated inventory management systems have revolutionized the restaurant industry by solving inventory-related problems, especially considering that about 70% of food items go to waste before ever reaching a customer’s plate.

The Role of Restaurant Owners and Operators

As we spotlight the industry’s linchpins, restaurant owners and operators, we’ll showcase relevant statistics to illustrate their essential role and the challenges they navigate in this vibrant sector.

• The restaurant industry is 70% dominated by independent owners and operators.
• Success in the restaurant industry is open to practically anyone. The National Restaurant Association reports that eight of every ten restaurant owners started their industry careers in entry-level positions.
• Additional research from the National Restaurant Association found that 47% of restaurant businesses are at least 50% owned by women – compared to 43% of businesses in the overall private sector. These figures represent 34% of restaurant firms that are majority-owned by women, as well as 13% that women and men equally own.

The Impact of Restaurant Operators on the Industry

• To counter rising costs, more than 40% of restaurant operators plan to invest in technology, including online ordering and digital payment solutions, to increase front- and back-of-house productivity, according to the 2023 State of the Restaurant Industry report.
• Restaurant owners have almost closed the gender pay gap. Female restaurant owners earn 96 cents for every dollar their male counterparts earn.
• According to one recent survey, 51% of restaurant operators plan to automate more online operations, and 41% plan to automate additional on-premise operations.
• The same survey found 82% of operators continue to focus on attracting and retaining employees with plans to increase compensation in ways ranging from higher wages and bonuses to better new tipping options for kitchen staff.

The Surge of Online Ordering in the Restaurant Industry

A digital transformation—online ordering—continues to sweep the industry. Check out the following compelling statistics illustrating this dramatic rise and its implications for the restaurant landscape.

• During the global pandemic and subsequent lack of in-house dining options, digital restaurant orders skyrocketed. U.S. delivery orders, in fact, increased by 142%, while carry-out orders rose by 130%.
• The surge of online ordering in the restaurant sector has resulted in a similar rise in competition. Once dominating the market, Uber Eats’ share of downloads in the U.S. food delivery segment has shrunk since 2017. During that time, the company’s share of total food delivery app downloads decreased by 18% to just 21% of app downloads in 2021. Meanwhile, demand for the DoorDash app grew from 12% of downloads in 2017 to 33% of food delivery app downloads by 2021.
• In a 2021 survey, U.S. consumers were asked whether they preferred using a restaurant’s app or website for food deliveries. A majority of respondents, 67% in fact, said they prefer using a restaurant’s own app or website for their food deliveries. The other 33% of respondents said they preferred using another online ordering method, such as a third-party app or website.
• The pandemic-related transition from in-house dining to online ordering did not reverse entirely as the world’s restaurant industry reopened its dining rooms. Prior to the pandemic, the online restaurant delivery sector held about 9% of the overall restaurant market. In 2020, the online restaurant delivery sector’s share rose to about 13%. The post-coronavirus market share, however, is expected to rise as much as 21% by 2025.
• According to the Toast report, loyalty programs, online reservations and mobile or web ordering options were restaurant technologies most important to guests’ experiences. Meanwhile, restaurant operators cited gift card programs, online ordering programs and WiFi availability as restaurant technologies most important to their businesses.

Fine Dining Restaurants: A Slice of the Industry

The next set of statistics shines a spotlight on the high-end of the industry spectrum—fine dining— along with the trends defining this niche yet influential sector of the restaurant world.

• Fine dining establishments were among the hardest hit during the COVID-19 pandemic, with revenue contracting a depressing 42.7% in 2020 alone.
• The U.S. fine dining restaurant market size in 2021 was $11 billion.
• According to the National Restaurant Association, the waitstaff at full-service restaurants earns a median of $27 per hour. The upper quartile of that group earns $41.50 per hour, while the lower quartile earns $19 per hour.
• Ruth’s Chris Steak House boasted the most sales of any U.S. fine dining chain restaurant in 2021, accruing $636 million in sales. Other top-ranking fine dining restaurant franchise organizations included The Capital Grille and Fleming’s Prime Steakhouse & Wine Bar.

The Role of Online Reviews in the Restaurant Industry

Looking for a serving of data that illustrates the power of restaurant reviews? The following statistics highlight online reviews’ profound impact on consumer behavior and business success.

• U.S. quick service restaurants received an American Customer Satisfaction Index score of. In that year, the U.S. quick service restaurant Chick-fil-A received a the ACSI score of 83.
• Among the quick service restaurants receiving the 24 highest ACSI scores in 2022, the median score was 75. The highest-ranking quick service restaurant that year was Chic-fil-A, with an ACSI score of 83. Other top-ranking quick-service restaurant brands included Jimmy John’s, KFC, Domino’s, and Panera Bread.
• When dealing with negative online reviews or in-person feedback, 23% of restaurateurs reach out directly to the person who gave the feedback, while 15% use the feedback in performance reviews. Just 2% of restaurant professionals said they never take action when receiving negative guest feedback.

Restaurant Industry Sales Statistics

By scrutinizing restaurant sales statistics, you can understand industry health critically. Keep reading for stats that identify how to keep up with trends, confront challenges and anticipate future predictions.

• The National Restaurant Association forecasts U.S. restaurant industry sales for 2023 will be $997 billion.
• While total dollar spending in restaurants trended higher in recent months, much of that growth was due to rising menu prices. With the exception of January’s strong performance, real eating and drinking place sales have remained relatively flat for much of the past year.
• After adjusting for menu price increases, April’s eating and drinking place sales volume was just 0.7% above the April 2022 level. In nominal terms, eating and drinking place sales were up 9.4% during the 12-month period.
• Restaurant profits are suffering in 2023. According to the National Restaurant Association, 85% of operators say their restaurants are now less profitable than they were in 2019. How could this be when sales continue to increase? Although wholesale food prices increased 16.3% between 2021 and 2022, menu prices rose only 7.6% in the same period, and only 16% of operators reported adding fees or surcharges to customers’ checks.

Examining the Restaurant Economy: Key Statistics

The next course of statistics serves as a detailed analysis of the restaurant economy. The following relevant statistics will help you dissect the economic factors influencing the sector, from cost variables to revenue patterns and market influences.

• In 2019, restaurants composed 51% of the American food industry dollar, compared to 25% in 1955. However, during the pandemic, 33.6% of each dollar U.S. consumers spent on domestically produced food was spent at food service establishments, according to the United States Department of Agriculture.
• While total dollar spending in restaurants now is trending higher, much of that growth is the result of higher menu prices.
• After adjusting for menu price increases, April 2023 eating and drinking place sales volume was just 0.7% higher than April 2022 levels. Overall, eating and drinking place sales were up 9.4% during the 12-month period.
• Eating and drinking establishments primarily compose the U.S. restaurant and food service industry. Prior to the coronavirus pandemic, these businesses generated approximately 75% of total restaurant and food service sales.

Restaurant Marketing: Statistics and Trends

Marketing is a critical ingredient in the restaurant industry’s recipe for success. The following statistics highlight its vital role, relevance and impact.

• Toast’s report examined what factors influence guests’ decision to frequent a particular restaurant. Food was the most important factor, as 72% of diners said food quality was important. Restaurateurs ranked value as the second-most important criterion, however, guests disagreed. Diners felt taste and flavor preferences were more important.
• The same research provides insight into restaurant loyalty programs. Free items are the preference for 49% of guests, while 47% of customers prefer cash discounts. Restaurant owners tend to agree, as 45% said guests prefer free items, and 30% thought diners prefer cash discounts.
• The number of restaurant followers on social media platforms varies widely depending on factors like location and type of cuisine. Still, the average-sized restaurant could expect between 1,000 and 10,000 followers on platforms like Instagram and Facebook.

The Future of the Restaurant Business

As we look toward the horizon, the restaurant industry promises exciting trends influenced by technology, evolving consumer preferences, and a renewed focus on sustainability. One dominant trend is the continued integration of technology, reflecting an industry-wide pivot towards online ordering, delivery apps and AI-driven customer service.

Sustainability is another rising trend among consumers. This translates into an industry shift towards locally-sourced ingredients, reducing food waste and more eco-friendly operations for many different types of restaurants. Of course, consumers’ quests for health and wellness continue a trend that indicates a growing demand for nutritious, allergen-free and personalized food options.

In navigating the future, restaurant owners should stay abreast of these trends and adapt their strategies accordingly, ensuring their businesses remain innovative, relevant and profitable in the evolving landscape.

Image: Envato Elements

This article, "Serving Up Data: Restaurant Industry Statistics" was first published on Small Business Trends