4 Restaurant Trends in 2024 to Watch Out for
As a restaurant owner, staying ahead of the curve and adapting to change is critical.
And while it’s not necessary to follow every passing trend, it’s important to embrace those that can attract more customers and boost your business.
In today’s blog, we’re diving into four restaurant trends for 2024 that we’re seeing across the industry that are worth adopting in your business.
And hey, don’t brush these off!
Go through each trend and ask yourself if it’s applicable to your business and if so, what you’re going to do about it. Hint: It most likely is!
Let’s dive in.
#1 The Decline of Tipping
There’s a perfect storm brewing that could cause the tradition of “tipping” to go out the window over the next few years. And while it might not become a full-fledged trend in 2024, the fallout from this trend is already underway.
So, what’s behind this shift away from tipping? A few things.
Most notably, the removal of the Tip Credit in major cities across the U.S.
Just recently in Chicago, the City Council voted to gradually eliminate the “tip credit.” This mechanism allowed restaurants to pay lower wages to servers who earned tips. As a result, restaurants are now facing the daunting task of increasing the wages they pay to tipped workers by a staggering 67% by July 2, 2028. Originally intended to take just two years, this transition has been extended to five years.
We wrote about the tip credit system in another blog.
In a nutshell, servers could use a portion of their tips to bridge the gap between their hourly wage and the minimum wage. For example, if a server earned $6.32 per hour in tips and the minimum wage was $15.80, the restaurant only needed to pay them $9.48 per hour.
With the removal of the tip credit, labor costs for restaurants are set to dramatically increase, a tough change for businesses already operating on thin profit margins.
This issue is sparking debates not only in Chicago but all across the country. Adding to the brewing storm is the fact that consumers are growing tired of tipping.
According to a recent survey by tech supplier Popmenu, the average person is asked for a tip five times a week, with over half (53%) saying they are getting tired of it.
Considering all these factors, it’s clear that restaurants will be compelled to experiment with non-tipping solutions.
Whether this means adding a service charge to the end of the bill or raising prices to accommodate the rise in labor costs remains to be seen.
At U-Nique Accounting, we strongly believe that industry-wide guidance or recommendations from governing bodies are essential to help navigate these changes.
Until such guidance is established, confusion may very well be the defining trend throughout 2024.
#2 To Service Charge or Not to Service Charge
In 2023, the service charge was suddenly everywhere.
One in five restaurants across the United States tacked on an arbitrary service fee to the end of every bill to account for rising labor costs.
And if you’re a regular reader of ours, you know how we feel about it.
However, with the looming challenges of inflation, increasing cost of goods sold (COGS), and the removal of the tip credit system, the persistence of this fee appears inevitable.
So, is the fee here to stay or is it just a temporary fix?
While we don’t have a crystal ball, we see the service charge sticking around for a while in 2024.
But that doesn’t mean that you have to adopt it. Just because something is trending doesn’t make it a good idea.
Here at U-Nique Accounting, we encourage our clients to practice transparency with their pricing instead.
If the steak dinner costs a couple bucks more than it used to, your customers get it!
What they might not understand is an arbitrary charge tacked on the end of the bill after paying tax and tip, with no explanation.
There are a range of things you can do to increase your profit margins and an experienced restaurant accountant can help. If you don’t have one you’re happy with, you can book a complimentary call with our team anytime.
Helping restaurant owners become more profitable is what we’re passionate about.
In the meantime, we wrote a detailed blog post about how to increase your restaurant prices here. Have a read of it and see how you go before resorting to the rage-provoking service fee.
#3 Inventory Analysis
In today’s competitive restaurant landscape, it’s more important than ever to be efficient with your costs.
This is why we’re going to see restaurants get more detailed with their tracking than ever before in 2024.
Restaurant owners are beginning to track the cost of every single recipe made, and every meal that goes out the door.
One of the best ways to do this is to invest in a good inventory management system.
Many clients who come to us at U-Nique Accounting have put off investing in one due to the cost, as good ones can run you around $10,000.
However, a system like MarginEdge can help you track your food costs, identify waste, and optimize your ordering process. Which can save you tens of thousands of dollars in the long run, and free up your staff to focus on other tasks.
With a good inventory management tool, you can monitor and adjust plate costs immediately. You’re able to see food cost percentages by recipe, which update continuously as costs change. MarginEdge’s menu analysis feature even allows you to see costs based on real-time ingredient prices and pinpoint profitable and high-volume items.
You can compare menu items within a specific category, like appetizers, entrees, or desserts, to see which plates are contributing the most to profitability and which aren’t.
Pretty cool, right?
Menu engineering has long been one of those things you know you should be doing more often (or just doing in general), but haven’t had the time. With a good inventory management tool, you can.
This is one trend we strongly recommend jumping on board, so don’t let the upfront cost of software deter you.
Investing in the right tools in 2024 can save you money in the long run and give you a valuable competitive edge.
Affordable Dining
We know, we know.
We’ve spent two-thirds of this article talking about the rise of increasing labor and food prices, and now we want to bring up affordability?
But while restaurant costs are trending upwards, consumers also have less money to spend than before, and we’re only likely to see that gap increase in 2024.
This is why we think that value and affordability will become a trend for the food industry in 2024.
Whether that’s taking it back to basics with your recipes—goodbye to truffle oil for now. Hosting community-style events that focus on large batches of good, simple food. Or simply making sure your menu is priced more reasonably than your neighbors.
Restaurant owners will continue to get creative with ways to appeal to a rising sector of consumers that value “value” and affordability in their dining experiences.
Which Restaurant Trends Are You Adopting in 2024?
As experienced restaurant accountants, we see a lot of trends come and go.
While some may be good to adopt (inventory management, we’re looking at you!), you don’t have to hop on every trend that comes around.
When it comes to running a successful restaurant, just remember:
- Focus on providing excellent customer service and value
- Transparency and clear communication are key to building trust with your customers.
- Investing in technology that will help make your operations more profitable
These three principles will go a long way in helping increase your bottom line. And that’s why we’re all here, isn’t it!
What restaurant trends are you seeing in 2024? We’d love to hear about them.
Until next time!
