While diners are paying more, chefs are making less, signaling issues lurking below the surface in the restaurant industry, according to a report from the James Beard Foundation. The 2023 Annual Industry Report was released on Thursday and provides a data-driven look at the current state of the independent restaurant industry.
The survey was fielded between October 23 and November 13, receiving more than 250 responses from chefs representing independent restaurants and operators.
Despite the industry being at its most stable since 2019, customers being more educated and engaged around the issues impacting the food system, and strides made in creating sustainable and equitable conditions for employees, rising costs hamper both operations and the public's dining out frequency.
The independent restaurant industry appears to have bounced back following tremendous challenges from the pandemic: over one-third of respondents reported more customers in 2023 than in 2022, 47 percent reported higher check averages in 2023, a slight majority reported tracking better or the same as 2019, and 72 percent report increasing menu prices by 10-25 percent in the last year. However, economic-driven challenges are proving margins are tighter than ever before, with 53 percent of respondents reporting lower profits in 2023.
This is largely driven by:
• Rising food and labor costs: 52 percent reported needing to raise wages 10-25 percent; only 16 percent of respondents did not raise wages,
• Inconsistent consumer behavior: While 36 percent of respondents saw an increase in customers, even more saw fewer customers in 2023 than in 2022.
"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," says Clare Reichenbach, CEO of the James Beard Foundation, in a statement.
In looking towards the next year, restaurant owners and operators expect to see much of the same issues, largely due to increasing food and labor costs and decreased consumer spending due to economic inflation.
Even with the bleak outlook, many respondents remain optimistic as a result of:
• Continued distance from the COVID-19 pandemic shutdown,
• An increase in consumer education around issues that impact both the independent restaurant industry and the food system.
• A drive to create better working conditions and benefits for industry employees,
• Advocacy efforts promoting change across the hospitality sector.
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