There are those in finance who project doom and gloom for 2024: A recession is coming, many say. Don’t tell that to restaurant operators, who seem bullish on the state of things. A new survey, conducted by Restaurant365, says that 57% of restaurants are planning to expand in 2024.

According to Restaurant365’s State of the Industry Customer Survey—which sourced responses from over 5,000 restaurants, from quick service to fine dining and everything in between—25% of restaurant operators plan to open at least one additional location in 2024. Twenty-eight percent are planning to open between two and five locations and 4% planned to open six or more.

Some of that bullishness is likely owed to the fact that food and labor costs finally began to show signs of leveling off in 2023. The majority of survey respondents who said their food costs rose in 2023 reported they only rose between 1–5%. Similarly, of the 89% of respondents who said their labor costs rose, more than half of them said it was in the 1–5% range. Both figures are a far cry from 2022, when food costs rose 10% while labor costs rose 9%.

Related: How To Raise Your Menu Prices In 2024

“Restaurant operators continue to show resilience and creativity as they find new ways to move their restaurants forward,” said Restaurant365 CEO and co-founder Tony Smith. “We’re seeing continued focus on the guest experience and a heavier focus on overall business operations. Expanding the use of integrated technology to drive efficiency, cost savings and growth have propelled many restaurants throughout the year.”

Slowing food- and labor-cost growth means that 61% of respondents are planning price increases in 2024. That’s well below the 82% of respondents who planned—and likely executed—price increases in 2023.

While labor costs may have quelled to some degree, it’s clear that restaurant operators aren’t taking their eye off the ball when it comes to taking care of their employees. Maybe it’s because the last few years have shown what a headache staffing can be, but survey participants predicted employee experience and retention would be the top-ranked challenge for them in 2024. That choice ranked first on a list of six different choices, checking in at 38%. That was followed by sales volume (24%) and labor costs (18%) as the most likely top challenges for the new year.

One of the ways operators might go about tackling those challenges, Restaurant365 posits, is by investing in technology that can help do things like efficiently recruit and reward employees. AI-driven tools, in particular, are being considered industry-wide: 41% of the survey’s respondents said they were considering investing in AI sales forecasting and scheduling, while 33 percent said they had plans to roll out AI-driven marketing.

“It’s a testament to the restaurant industry that, a year after many braced for uncertainty and a potential downturn, leaders are now planning to invest in critical functions across their businesses to bolster every aspect of this essential sector of the U.S. economy,” Smith said. “As the pace of change in innovation, consumer preferences and the economy speeds up, operators that embrace efficiency-and value-adding technology, whether in the back office, the order counter or the dining room floor, are the ones best positioned to flourish.”

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