Restaurants and Food Services

Restaurants and Food Services

Industry Outlook

The U.S. restaurant and food service industry has grown from a $590 billion industry in 2010, to an $899 billion industry in 2020. In early 2020, the National Restaurant Association projected that restaurant industry sales would reach $1.2 trillion by 2030. This number may decline, however, as the full impact of the global pandemic on the restaurant and food service industry is yet to be realized. Restaurants and other food-service providers are so widespread that six out of 10 adults have worked in food service in one way or another at some point in their lives. The restaurant and food service industry employs about 10 percent of the workforce in the United States and both industry organizations and the Bureau of Labor Statistics projects that employment will grow.

The BLS projects much faster than average employment growth for food services managers (11 percent) and food workers (14 percent, through 2028. Meeting and convention planners and market research specialists employed in this industry will also experience faster than average employment growth (between 7 to 20 through 2028. Employment is also expected to rise at faster than average rates for all food preparation and service workers, including fast food cooks. The National Restaurant Association forecasts that employment will reach 17 million by 2030, a gain of 1.6 million new restaurant jobs.

Operators of table service restaurants identified the effects of health care reform, the state of the economy, and possible government regulation of the industry as the most challenging issues for the industry. Other concerns include growing and sustaining sales, managing costs, and training and retaining employees.

Restaurants are growing the fastest in Southern and Southwestern states, especially Arizona, Texas, Florida, Nevada, and Georgia.

Growth in the restaurant industry is being hindered, however, by the coronavirus pandemic, which has forced many U.S. restaurants to close, starting in March 2020. The National Restaurant Association reported that 30,000 U.S. restaurants went out of business and more than 110,000 were expected to close down permanently in April 2020. The restaurant industry lost an estimated $25 billion in sales and more than 3 million jobs in the first three weeks of March 2020, and the industry continues to experience the impacts of the pandemic. Regarding the outlook for the immediate future, as one restaurant professional put it, "COVID-19 will result in some long impacts on our industry. Awareness of health, sanitation, and food safety will be important on both sides of the counter, for the employees and the consumers."

The accelerated distribution of the COVID-19 vaccine in 2021 is improving the outlook for the U.S. restaurant industry. As businesses reopen and social distancing requirements ease, consumer spending on restaurants will grow. The research group IBISWorld predicts steady growth through 2026 for the single location full-service restaurants industry in the U.S. "The Consumer Confidence Index, a leading indicator of spending patterns, is expected to recover strongly, which will boost industry growth over the next five years." As of early 2021, the U.S. single location full-service restaurants industry consisted of 168,386 businesses, with total employment of more than 3.2 million people.

In general, the health of the restaurant and food service industry remains vulnerable to economic trends and changes in public tastes. When the economy is weak, people often cut back on restaurant spending. Rising costs for food and other supplies or the cost of transporting them can also have a negative effect on restaurant business. Restaurants that update their menus are better poised to retain customers who may grow tired of certain dishes or drinks. Many restaurants now offer customers the opportunity to order or make reservations online or engage with the business via social media, an important part of keeping diners interested and informed about a restaurant's offerings.