By Clinton Anderson|Dec 11, 2023|6:36 pm CST

In the last three years, the restaurant industry has navigated through some of its toughest challenges. The pandemic emptied dining rooms, pushing consumers towards at-home dining. Then, when diners started to return, a strained labor market, rising inflation, and disrupted supply chains sent labor and food costs soaring. 

Yet, 2023 marked the beginning of a turnaround. We saw diners return in force, a reduction in food inflation, improvements in the labor market, and a smoothing out of supply chain wrinkles. As Cristin O’Hara, managing director of Bank of America Global Commercial Banking’s Restaurant Group, aptly puts it, “After so much uncertainty, the absence of a crisis du jour alone warrants celebration.” 

As we enter 2024, these improved dynamics mean restaurant owners and operators are shifting their focus from survival to growth. This sets the perfect backdrop to delve into five key trends poised to shape the restaurant landscape in 2024, guiding operators toward sustained success in an ever-evolving market.

1. Tech Innovation

In 2024, technology is taking center stage in driving operational excellence and enhancing customer satisfaction. As Bank of America noted in its outlook for 2024, “The potential for advanced technologies to introduce efficiencies is growing at a rapid pace. Restaurant operators who leverage these capabilities while adapting to the shifting consumer landscape will be well-positioned for growth.”

Consider the surge in mobile ordering. According to GrubHub, mobile ordering is on the rise, especially at airport restaurants and other quick-service restaurants where diners can save time by ordering ahead on their phones. It also cuts down on errors and improves operational efficiencies.

Another area where restaurants continue to innovate is automation. Take Sweetgreen’s Infinite Kitchen, for example. The restaurant chain plans to expand its automated kitchen in 2024. According to Sweetgreen CEO Jonathan Neman, diners like the speed and cleanliness of the system, while team members are able to focus more on the hospitality experience.

Then there’s AI-powered demand forecasting, a game-changer in inventory and labor management. Fourth’s advanced AI forecasting uses machine learning algorithms to sift through your data, spotting trends and predicting future needs with remarkable accuracy. As we move forward, these tech innovations will redefine the restaurant industry, paving the way for more cost-effective, efficient, and customer-centric operations.

2. Enhancing employee experience and retention

Despite a more stable labor market, the leisure and hospitality industry has the highest quit rates in the nation. With the constant pressure to reduce labor costs to drive profitability, restaurant owners and operators are turning their attention to delivering a positive employee experience that motivates restaurant staff to stay. 

One benefit restaurant employees increasingly look for is on-demand pay. In fact, 95% of hourly workers prefer working for employers that offer earned wage access. They appreciate the greater flexibility and financial stability that comes with the ability to access their earnings as needed, reducing their reliance on credit cards, payday loans, or other forms of high-interest borrowing. 

Offering better benefits can help you stand out, but it isn’t the only lever you can pull to drive retention. Investing in your managers can have a ripple effect through your entire team. According to Gallup, over half of employees quit their jobs because of a bad boss. By offering ongoing leadership training and development for restaurant managers, you’ll motivate them to stay and help them become better bosses. Everyone wins.

3. Evolving Consumer Preferences

Another trend that demands attention is consumers’ continuing focus on health, particularly the scrutiny of highly processed foods. Consumers are increasingly conscious of what they eat, leading to a significant shift in preferences. As Mintel shared in its 2024 Global Food and Drink Trends report, “Scrutiny of processing use in the food and drink industry is intensifying. Fueled by discussions about highly, overly or ultra-processed food (UPF), feelings about processing will inspire consumers to look more closely at ingredients, nutrition and production methods.”

Adapting to this shift is crucial for restaurants. It’s not just about offering healthier options. It’s about understanding and responding to the evolving palates of diners. Restaurant owners and operators can stay ahead of these trends by listening to diners’ feedback, reading reviews, and even using tools to track sentiment to gauge what customers truly want.

By taking this data-driven approach, restaurants can tailor their menus and offerings to create a dining experience that resonates with today’s health-conscious consumers. 

4. The power of loyalty programs

Loyalty programs in the restaurant industry aren’t a new concept, but the interest in them is greater than ever. According to Square’s 2024 Dining Report, 76% of diners are interested in signing up for loyalty programs at restaurants for exclusive deals and discounts. What’s even more intriguing is that 70% of respondents also said that “they’re okay with sharing data when joining a restaurant loyalty program, with the expectation it will help the restaurant serve them better.”

So, how do you make these programs a hit? Keep it simple and engaging. A loyalty program that’s a hassle to join is a no-go. And use the data you gain wisely. Personalization is key. Offer rewards that make customers feel like you know them — because you do. Tailored deals show you’re paying attention, whether it’s a discount on a favorite menu item or a special treat for their birthday.

Top 3 benefits diners want in a restaurant loyalty program

1. 73% want the ability to earn free food or products
2. 64% want daily discounts
3. 56% want rewards around special events such as birthdays and holidays

*source: Square 2024 Consumer Dining Report

5. Compliance as a growth enabler

For restaurant chains eyeing expansion in 2024, compliance will be top of mind as they navigate new and different labor laws and regulations.

Navigating the regulatory landscape can be tricky, especially with more states and cities implementing Fair WorkWeek laws. Restaurant owners, operators, and managers need to stay on top of these regulations to ensure smooth operations and avoid costly penalties. For a comprehensive look at the evolving regulations, HR Dive offers a running list of states and localities with predictive scheduling requirements.

Automating compliance will help expanding restaurants roll out to new markets faster and with fewer risks. Technology solutions with built-in compliance help managers build employee schedules that automatically adhere to Fair WorkWeek laws, minor labor laws, overtime rules, and more.

Setting the stage for success in 2024

2024 brings with it a wave of optimism for the restaurant industry. Demand is high, and the challenges of the past three years are (finally) showing signs of abating. Make this year all about embracing change and making it work for you — whether through tech innovation, improving your employee’s experience, adapting to evolving consumer preferences, rewarding loyalty, or taking the guesswork out of compliance.

Whatever your goals for 2024, we’d love to help. Make 2024 not merely a successful year but a groundbreaking one for your business. When every hour of every shift matters, Fourth helps you conquer the day.