WASHINGTON — The foodservice industry is expected to see a record $1.1 trillion in sales in 2024, according to the National Restaurant Association (NRA).

The optimistic prediction comes from the group’s annual “State of the Restaurant Industry” report, which uses survey responses from restaurant operators and consumers and analyses from NRA economists to identify trends and projections within the segment.

“With more than $1 trillion in sales expected this year, the state of the restaurant industry is strong thanks to the agility of its operators and employees,” said Michelle Korsmo, president and chief executive officer of the NRA. “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.”

Forty-five percent of operators said they expect their sales to remain consistent with their 2023 numbers, and 33% of operators said their sales are anticipated to increase. Expectations for profitability are less positive, though, with just over a quarter of operators predicting their restaurants will be more profitable in 2024. The 20% rise in average food costs and 30% increase in average labor costs since 2019 may be behind the lower profitability outlook, in addition to debts generated during the pandemic that 43% of operators report owing.

The restaurant industry also is set to add 200,000 jobs in 2024, with a sustained growth projection of 150,000 jobs created annually through 2032. Restauranteurs are still facing staffing difficulties, however. Over 40% of respondents report not having enough employees to support existing customer demand, and 27% said employee recruitment and retention will be their most significant challenge.

Operators are turning to technology to ease their employment challenges, building off a key trend from the NRA’s 2023 report. Nearly half of operators expect technological solutions and automation will become common methods of dealing with labor shortages. Chipotle, for instance, has already begun to test automated assembly lines for burrito bowls. Investments in technology also will expand beyond relieving employment challenges.

Over 75% of operators believe technology gives them an edge over their competition, and 60% plan to make investments in 2024 to enhance the customer experience. Focus areas will include ordering and payment technologies that increase the ease of operations. Market researchers Technomic and Datassential have similarly predicted that technology investments will be a major foodservice trend, particularly ordering systems for streamlining online and takeaway orders and back-of-house capabilities.

Off-premises dining also continues to be an important trend for operators. More than half of consumers say ordering takeout from a restaurant is an essential part of their lifestyle, particularly for 67% of millennials and 63% of Gen Z. Companies like Panera Bread are capitalizing on this “key area of opportunity,” launching nationwide drive-thru pick-up capabilities in May and testing new restaurant formats centered on to-go orders. Starbucks has gone one step further and added drive-up order pickups for all of its 1,700 Target Corp. locations as part of its partnership with the retailer.

The NRA expects food costs and supply chain challenges will remain hurdles in 2024. Most operators report having to shop for new suppliers last year, and increased food costs led 53% to cut items from their menus. Additionally, 77% of respondents said they experienced supply delays or shortages of key food or beverage items in 2023 that further altered their menu offerings.