During a time when our public discourse tends to be divided, 90% of Americans can agree on one thing: they like going to restaurants.

That was a key message offered by the National Restaurant Association and Hudson Riehle, senior vice president of the association’s Research and Knowledge Group. (Riehle and other association leaders made their remarks during the organization’s annual State of the Industry press conference.) For the restaurant industry, though, that kind of consensus is more than a good thing; it’s a necessity given the ongoing challenges operators will face in the coming year.

First, a little more good news. Overall restaurant industry sales will grow to a record $1.1 trillion in 2024, per the NRA. Roughly eight in ten operators project their sales will increase or, at the very least, hold steady compared to 2023. The growth will be modest, but it will be real.

One reason for the industry’s anticipated growth is a strong job market, which saw U.S. companies added more than 350,000 positions in January 2024. “When people are employed they have less time to prepare food at home and have more money to spend in restaurants,” Riehle noted.

The way consumers use restaurants continues to evolve. For example, in February 2020, operators reported that 39% of their sales came from customers who chose to dine on-premises, and 61% came from consumers eating their food off-premises. As of December 2023, off-premises consumption represented 74% of all meals sold by restaurants, per NRA data.

It comes as no surprise, then, that delivery, carryout and drive-thru will remain center-of-the-plate service options for on-the-go consumers. In fact, 52% of consumers — including 67% of Millennials and 63% of Gen Z adults — say ordering takeout from a restaurant is an essential part of their lifestyle, further showing the profound impact restaurants have on consumers’ lives, per the NRA data. In other words, for as much as the industry has changed, one key driver of restaurant usage remains the same: convenience.

Operators anticipate a complicated operating environment for the coming year. Only 27% of operators expect to be more profitable this year, per the NRA. “We’ve heard from our members that rapidly increasing costs are a key concern for operators,” said Michelle Korsmo, the NRA’s president and CEO.

Average food costs have increased more than 20% and average wages more than 30% from 2019 — both impacting profitability. “This is the highest period of wage increases in the industry’s history,” Riehle adds.

Indeed, labor remains a key pain point. In fact, 33% of operators say recruiting employees remains their top priority, per the NRA. Other top operator concerns, per the NRA study, include sales (17%), the economy (14%) and food costs/availability (8%).

In a labor-intensive industry such as foodservice, employees play a vital role in generating sales. It takes 12.1 individuals to generate $1 million in sales in the foodservice industry, which is considerably higher than other business segments, Riehle notes. That means, at least for the time being, larger industry employment will play a key role in driving sales.

To that end, the restaurant and foodservice industry is projected to add 200,000 jobs in 2024, bringing total industry employment to 15.7 million, per the NRA. Between 2024 and 2032, NRA projections call for the industry to add 150,000 jobs per year on average, with total staffing levels reaching 16.9 million by 2032.

Despite this expansion, 45% of operators say their restaurant doesn’t have enough employees to support existing customer demand, per the NRA. Operators looking for the necessary support are turning to the gig economy and technology. One in four operators say using gig workers to fill in staffing will become more common in their segment in 2024 and 47% of operators say the use of technology and automation to help with the current labor shortage will become more common.

Technology can play a critical role in helping operators overcome some of these challenges, but that will require some investment. In 2023, 48% of operators made technology investments to enhance the customer experience. More than half now report they plan to invest in technology that will enhance the guest experience and make the service area more efficient. Additionally, 52% will invest in items that will drive kitchen productivity and efficiencies, and 45% plan to strengthen cyber security, per the NRA.

Restaurants remain a cornerstone of their communities, Riehle noted. More than 84% of operators have made a charitable donation since the start of the pandemic, he said.

“The industry remains one of the most nimble and resilient industries in the U.S. economy,” Korsmo added. “Restaurants are finding ways to adapt to the challenges of increased food costs and supply chain disruption. Restaurants have responded well to customers’ desire to have more opportunities to enjoy restaurant meals, which continues to grow sales, create employment opportunities, and foster a strong sense of community.”