Inventory management is a critical aspect of running a successful restaurant or bar business, but strategies are constantly evolving. Throw into the mix rising wages, skyrocketing food prices, staffing shortages, inflation and a difficult economy and the hospitality industry is no doubt set for a difficult year.
But that doesn’t mean profit and growth isn’t there to be had by restaurants and bars.
Let’s explore the seven top trends impacting restaurant and bar profitability as we move through 2023 and how, by understanding the current movements of the market, hospitality businesses can find new growth.
This blog is a summary of our new guide, 7 Restaurant and Bar Trends to Watch Out For in 2023. If you would like to explore this subject in further detail please feel free to download your copy by clicking the below image.
1. High inflation continues into the year
With a potential recession on the horizon, inflation rose steadily through 2021 and 2022, and looks increasingly likely to continue that trend as we move through 2023. This means business is becoming more expensive for restaurants and bars, with property, wages, and product costs all rising.
To mitigate this impact, restaurants will focus on tactics such as:
- Increasing menu prices where appropriate
- Improving control of their inventory
- Making creative ingredient substitutions that rely on cheaper products
- Reviewing the performance of their menu and cutting out unprofitable items
2. A focus on inventory management to improve profit margins
Restaurants and bars can no longer afford to spend money on products that are never used or never sold. This can eat significantly into a company’s profit margin, especially when inflation, labour shortages and rising prices are already impacting profitability.
That’s why many businesses in 2023 will increasingly focus on inventory as a precious investment into the profitability of their business. Restaurants and bars will put special emphasis on ensuring they have complete visibility and control over their inventory, allowing them to boost profit margins.
3. Investment into modern technologies
In line with the focus on improving inventory management, many owners will increase their investment into modern technologies over the coming year to reap the benefits that come with improved efficiencies and more insightful data.
Technologies - such as inventory management systems, handheld point-of-sale systems, contactless payment and digital kitchen displays - can help restaurants and bars to find new efficiencies in their back-of-house processes, minimize the strain that comes with staff shortages, enhance their inventory management results, better meet customer expectations and optimize day-to-day operations.
4. Expert help will augment technology
It’s not just technology where bars and restaurants can find help with their processes and insights. Business owners can find invaluable assistance from people who have been there and done it before, and have helped countless other businesses to navigate tough financial climates successfully.
In 2023 we expect to see more business owners than ever before seeking expert advice from third-parties that are profoundly experienced when it comes to boosting restaurant and bar profit margins.
5. Diner expectations will be different
According to this new report from TouchBistro, the past few years have seen major shifts in diner behaviours and preferences. From the importance of having an online menu to pickup being the preferred takeout option, the diner-restaurant relationship will continue to evolve as we move through the year.
6. Navigating supply chain shortages
From chicken wings, alcoholic beverages, lettuce and cherries, there has been a huge shortage and delay in the supply chain of food and drink stock in recent months. Not only that, but non-food items like takeout containers, walk-in freezers and glass bottles have also been impacted by supply chain disruptions.
To mitigate supply chain disruptions, bars and restaurants will:
- Increase the flexibility of their business and improve their ability to make menu substitutions
- Find backup suppliers
- Better communicate with customers about unstocked items.
7. New methods to mitigate the effect of the skills gaps
The combination of the COVID-19 pandemic and what has been dubbed as ‘The Great Resignation’ pushed the shortage in hospitality workers to a crisis level over the past few years. In many cases, restaurants and bars dramatically scaled back their operating hours in a bid to offset staffing challenges.
To address this, restaurants and bars will look at implementing new initiatives and processes in 2023 to mitigate the impact of staffing shortages. These include:
- Unlimited vacation requests
- More flexible work hours for team members
- Improved team benefits
- The use of technology, and automation, to improve efficiencies
- Speeding up the application process to beat competitors
Interested in learning more about the trends that restaurants and bars can expect to see in 2023? Download your free copy of our 7 Restaurant and Bar Trends to Watch Out For in 2023 guide today.