Restaurant Revenue Statistics, Trends, and Predictions

Key Takeaways

1. The average restaurant profit margin is climbing (source)

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Industry data reveals the average net profit margin for restaurants and dining establishments in Q1 2024 was 12.13%, with a gross margin of 77.59%.

This figure represents a slight improvement over the same quarter in 2023, when net profit was 12.11% with a gross margin of 77.51%. (That’s a .02% and .08% improvement, respectively.)

However, this is a significant increase since 2016 when the study began collecting data. In Q1 of that year, net margin was 8.48% with a 55.01% gross margin. This means net profit margin has increased 3.65% and gross profit margin has increased 22.58% over the past eight years.

The profit margin is a vital statistic for potential investors and current restaurant owners as it reflects the profitability of the industry. Restaurants have to balance their expenses carefully, from labor and food costs to overhead expenses, to maintain or increase their profit margins.

2. Americans spend more than a third of their food budget at restaurants and other food service establishments (source)

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Data from the USDA indicates that 34.1% of every dollar spent on food by Americans goes to food services, which include restaurants and other food service establishments.

Over the past decade, dining out expenditures have steadily increased. In fact, from 1997 to 2022 spending on food away from home increased by 89%, while spending on food at home increased by 53%​.

Additionally, three segments are down to their lowest share in years:

• Retail trade now accounts for 12.4 cents of the food dollar, the lowest share since 1995.

• Wholesale trade represents 10.7 cents, the lowest share since 2011.

• Food processing accounts for 14.4 cents, the lowest share since at least 1993​.

These shifts indicate that consumers increasingly prefer dining out over traditional food purchases.

By understanding these trends, restaurant operators can better strategize to meet consumer demands and capitalize on the increasing inclination toward dining out.

3. More than two thirds of restaurants increased menu prices in 2023 (source)

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A 2024 report showed that 67% of restaurants had increased their menu prices over the past six months. Restaurants increased menu prices an average of 13% from 2022 to 2023, which is less than the average 15% increase in menu prices over the previous year.

This trend reflects the industry's response to rising costs, partly due to inflation, supply chain disruptions, and staffing costs. Of surveyed operators, 58% identified rising inventory costs as their top source of financial strain, an increase from 54% the previous year.

Also, 60% of respondents said all or most suppliers raised prices over the past year, up 10% over the previous year. Over the past year, the average expenditure on food surged by 41%.

While raising prices can risk customer pushback, it indicates that restaurants are proactively managing their financial health. Strategic price increases, coupled with value additions such as improved service and enhanced menu offerings can help maintain customer satisfaction while supporting revenue growth.

Important Restaurant Revenue Statistics

Here are important restaurant revenue statistics that will help restaurateurs understand the state of the restaurant industry today—and make data-driven decisions in restaurant management.

4. Restaurant sales increase 9.1% with the right background music, but can drop 4.3% with the ‘wrong’ music (source)

According to our analysis of 1.8 million restaurant purchases, the right background music for restaurants is a mix of hits and lesser known songs that fit their brand.

For example, with the right music:

• Dessert purchases increase 15.6%

• Soda purchases increase 7.6%

• Purchase of hot drinks increases 7.6%

• Sale of shakes and smoothies increases 8.6%

• Purchase of sides increases 11.1%

• Burger purchases increase 8.6%

• Sale of fries increases 8.2%

Meanwhile, playing only brand fit hits results in only a 5.5% increase in revenue, and playing music that doesn’t fit the brand can actually hurt sales.

5. Projections forecast a record $1.1 trillion in U.S. restaurant industry sales in 2024 (source)

This milestone highlights the restaurant industry’s robust recovery from the pandemic and economic downturn of recent years and shows the industry’s massive economic impact​. As a result of this growth, the industry will create 200,000 jobs, increasing total employment by the industry to 15.7 million Americans.

6. Online food delivery services are expected to reach $570.40 billion in the U.S. by 2029 at a compound annual growth rate (CAGR) of 10.05% (source)

This includes $114.50 billion in meal delivery from restaurants and $455.90 billion in grocery delivery.

The projected total for 2024 is $353.28 billion, which includes $95.78 billion for meal delivery and $257.5 billion for grocery delivery.

For comparison, the total market share in 2017 was $66.18 billion, including $23.38 billion for meal delivery and $42.8 billion for grocery delivery. The meal delivery market share alone has grown by $329.9 billion over the course of seven years.

7. Happy hour sales account for 60.5% of a restaurant or bar’s revenue (source)

Happy hours are a significant revenue driver for bars and restaurants with alcohol service. These promotions attract customers during off-peak hours, boosting overall sales and profitability.

The average bill during happy hour is $68.99, approximately $8 more than the average bill during other times of day.

8. Restaurants typically invest 3-6% of their revenue into marketing (source)

Effective marketing strategies are essential for attracting new customers, retaining existing customers, and driving sales growth.

In addition to other strategies for increasing restaurant revenue, like building a strong social media presence, establishing loyalty programs, and managing online reviews, marketing helps restaurants promote their brand and increase visibility in a competitive market.

Allocating a portion of sales to marketing is essential for new restaurants and small businesses as well as chain restaurants with locations all over the world.

9. Restaurants waste an estimated $25 billion worth of food annually (source)

Reducing food waste can significantly impact a restaurant’s bottom line and sustainability efforts. Here are some startling food wastage statistics:

• 10% of food acquired by restaurants is wasted before it reaches the customers.

• Almost 20% of the food on a customer’s plate is not eaten.

• Customers leave 55% of leftovers on the table.

10. 70% of diners prefer to order directly from a restaurant’s website (source)

After learning that 68% of food and drink professionals pay commission fees to digital ordering suppliers, 70% of diners said they’d rather order directly from the restaurant to ensure their money supports the business.

Only 15% of consumers were indifferent to how much money the restaurant received from their order​.

Offering direct online ordering can help restaurants retain more revenue and build stronger customer relationships.

What These Restaurant Revenue Statistics Reveal

Understanding these insights can help restaurant owners, investors, and stakeholders understand current trends, project future directions of the industry, and make informed decisions.

The industry is resilient to challenges and stronger than ever. 

With record sales projected for 2024, the restaurant industry is surging ahead. This is partially driven by the fact that, despite increased costs, approximately 90% of adults enjoy eating at restaurants.

This robust consumer demand for a restaurant dining experience highlights the importance of adapting to changing market conditions to capitalize on this growth.

Labor and cost management are key

Assuming labor costs will constitute 30-35% of a restaurant’s revenue, effective labor management is crucial for maintaining profitability.

Ongoing labor shortages and wage inflation necessitate innovative solutions to manage these costs. Automation and efficient use of POS systems can help reduce labor expenses without compromising service quality.

Additionally, offering competitive wages and benefits can help attract and retain skilled restaurant employees, further enhancing operational efficiency.

Food waste and sustainability must be addressed

The billions of dollars worth of food that is wasted annually by restaurants highlights the need for better food waste management practices.

Reducing food waste not only improves a restaurant’s bottom line but also aligns with growing consumer demand for sustainable practices. Implementing effective food inventory management and waste reduction strategies can lead to cost savings and improved sustainability.

For example, one organization helped reduce food waste by $318 million in 2023, which represents roughly 1.2% of total food sales.

Food delivery services will be an increasingly important revenue stream for restaurants

For people with increasingly busy lifestyles, online food delivery can be even more convenient than takeout—and that’s exactly what’s driving the market growth in the United States. However, China is projected to be the market leader for 2024, generating $448.9 billion by the end of the year.

In response, restaurants are investing in delivery infrastructure and partnerships with third-party services to capture this growing market, evidenced by the fact that a reported 41% of restaurants use at least three to four platforms for online food delivery.

These include DoorDash and other delivery apps that allow customers to order food for off-premise eating.

How to Improve Restaurant Revenue

Restaurant owners with fast-food franchises, fast-casual dining establishments, and full-service restaurants can leverage restaurant technology, improve cost management, and expand service offerings to enhance profitability and help ensure long-term success.

Moreover, the potential revenue generated from offering special promotions like happy hours and playing the right background music make these important elements for a revenue growth strategy.

However, it’s important to remember that you can’t simply stream your personal Spotify account in your restaurant without risking a lawsuit.

Soundtrack Your Band is a commercial music streaming service that provides access to more than 100 million fully licensed tracks and over 1,300 playlists. It’s the only service that lets you legally play what you want, when you want, in a business establishment.

The service is also unique in that it offers an AI Playlist Creator that allows you to generate brand-fit playlists from simple text prompts, and Soundtrack even makes it possible to legally import your playlists from Spotify.