Corporate Profiles - 2024 - 44

GRAIN-BASED FOODS
Foodservice
S
Profitability elusive even as sector sales approach $1.1 trillion
ales in the foodservice industry this year were forecasted to reach
a record $1.1 trillion, according to projections from the Washington-based
National Restaurant Association (NRA). The outlook
was fueled by optimism in technological improvements and growth in
off-premises dining opportunities.
" With more than $1 trillion in sales expected this year, the state of
the restaurant industry is strong thanks to the agility of its operators and
employees, " said Michelle Korsmo, president and chief executive officer
of the NRA. " Restaurants are finding ways to adapt to the challenges
of increased food costs and supply chain disruption. Restaurants have
responded well to customers' desire to have more opportunities to enjoy
restaurant meals, which continues to grow sales, create employment
opportunities and foster a strong sense of community. "
Expectations for profitability are less positive, though, and just over
a quarter of operators predicted their restaurants would be more profitable
in 2024. The bearish sentiment primarily was driven by expected
higher average food costs and labor costs, along with debts generated
during the pandemic, which 43% of operators report taking on.
The restaurant industry also was expected to add 200,000 jobs in
2024, with a sustained growth projection of 150,000 jobs created annually
through 2032. Operators still reported staffing difficulties, with
40% indicating they did not have enough employees to support existing
customer demand, and employee recruitment and retention was
deemed the most significant challenge.
OPERATING TRENDS
In-person dining continues to find post-pandemic momentum,
according to market research company Datassential, Chicago. The
RESTAURANT INDUSTRY IN 2024
operational trends
+1.1TRILLION
Forecast
industry sales
1MILLION+
Outlets
15.7MILLION
Employees
Source: National Restaurant Association
The industry is
expected to add
1.2MILLION
jobs over the next
8 years reaching
16.9MILLION
by 2032.
90%
of restaurant
operators say
their customers
are more valueconscious
than
they used to be.
76%
of operators
say technology
gives them a
competitive
edge.
More than 8 in 10
adults would take advantage of discounts
for dining on slower days of the week
or off-peak times of the day.
44 \ October 2024
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Among
consumers
not currently
enrolled,
sa 81%
y they'd be
likely to join
a loyalty
program if it
was offered.
company's 2024 midyear trends report found that 46% of restaurateurs
have noticed an increase in in-person dining during the year,
and only 12% reported a decrease in traffic. Fast casual operators
most frequently reported an increase in in-person dining (55%),
while midscale operators were the top segment to report a decrease
(22%).
Off-premises dining opportunities remain an area of opportunity for
operators. The NRA found more than half of consumers say ordering
takeout from a restaurant is an essential part of their lifestyle, and the
trend especially resonated with younger cohorts as 67% of millennials
and 63% of Gen Z identified takeout as essential. More than a third
(36%) of operators reported seeing an increase in frequency of pickup
and takeout orders, and 20% saw an increase in delivery orders, according
to Datassential's report.
The NRA additionally noted operators are expecting to lean on technology
to improve consumer visits and alleviate employment challenges.
More than 75% of operators said they believe technology gives them
an edge over their competition, and 60% planned to make investments
in 2024 to enhance the customer experience. Areas of focus include
online ordering systems that streamline takeout and drive-thru advance
ordering, payment technologies that increase the ease of operations,
kitchen equipment that can automate repetitive tasks and data software
that helps drive operational efficiency.
" Thinking about technology starts with understanding the value
proposition you offer your customers, determining their needs, wants,
preferences, and behaviors and then tailoring your technology and service
accordingly, " Korsmo said in her keynote address at the NRA Show
in May. " This is the high tech and high touch approach that is critical in
Corporate Profiles
INDUSTRY REVIEW: foodservice
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Corporate Profiles - 2024

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