Inflation Tops List of Challenges for Restaurants in 2023, TD Bank Survey Reveals

Inflation is the number one challenge for restaurants as they look towards 2023, based on a survey conducted by TD Bank, America’s Most Convenient Bank®, at the 2022 Restaurant Finance and Development Conference in Las Vegas. The survey polled 300 restaurant franchise operators and finance professionals to identify key trends in restaurant franchise finance.

Besides inflation, respondents also cited labor shortages (32{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0}), supply chain disruptions (16{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0}), and rising interest rates (11{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0}) as factors impacting their businesses. Despite concerns about inflation, operators continue to find opportunities for investment, with physical locations remaining a priority, and a similar number of respondents focusing on developing digital and delivery services.

The survey found that 69{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} of participants have noticed a decrease in labor quality and availability due to the current macro environment. Only 24{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} reported an improvement in labor quality and availability.

As restaurant franchise operators face challenges due to the macro-economic environment, they are still planning for the future by investing in their businesses. 41{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} of operators plan to invest in in-store reimagining, remodeling, or digital and delivery systems. Technology investments, including new POS systems, digital signage, and in-store tech, are also high on the agenda, with 38{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} of operators planning such upgrades. 37{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} are planning to invest in mobile ordering, while 23{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} plan to invest in delivery services and 16{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} in alternative payment methods.

Despite the challenges, 66{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} of restaurant franchise operators and industry professionals feel optimistic about 2023. However, 18{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} are indifferent about the industry’s future, and 13{5c94e41db43f1643af886a760ed785f3e6f3e4efec1ac57b512d948d7f011ae0} feel negative about it. The survey indicates that restaurants that invest in digital and delivery systems, in-store reimagining, and remodeling will have a distinct advantage in the ever-changing landscape.

The study was conducted at the 2022 Restaurant Finance and Development Conference held in Las Vegas, Nevada from November 14-16, 2022, polling a total of 300 restaurant franchise operators and finance industry professionals.

This article, “Inflation Tops List of Challenges for Restaurants in 2023, TD Bank Survey Reveals” was first published on Small Business Trends