STUDY: LA Restaurants Recover 77% of Pre-Pandemic Sales Volume
The 2023 Los Angeles State of Restaurants report released by TouchBistro reveals that restaurant sales in Los Angeles, on average, have recovered to only 77.4% of pre-pandemic levels, which is about 3% higher than the national average. However, due to the rising cost of food and other expenses, the profit margins of full service restaurants in Los Angeles dropped to 9.4%, which is 1.2% lower than the U.S. average of 10.6%.
The rising cost of food and supplies is among the top obstacles that hospitality businesses are facing nationwide, with 37% of restaurant owners surveyed indicating this as their biggest challenge. According to a recent National Restaurant Association Survey, 92% of operators say food costs are a significant challenge.
Highlights from the 2023 Los Angeles State of Restaurants Report
- The average menu price increase in Los Angeles is 15.6%, which is in line with the national average.
- Los Angeles restaurants report spending 50% more on food costs on average compared to the year prior, which is 7% more than the U.S. average.
- 95% of Los Angeles restaurants say they are short staffed, with most operators saying they are short about six staff members on average. This is likely due to the city’s high turnover rate of 27%. In New York City the average staff turnover rate is 33%.
- Direct online ordering is increasingly preferred – On average, Los Angeles restaurants are now processing 24% of their sales through online ordering platforms. And while Uber Eats and GrubHub are tied for the most popular online ordering platforms in Los Angeles, direct online ordering through a restaurant’s website is a close second, with 48% of operators preferring this type of solution.
- Staff training costs have increased – Operators in Los Angeles reported spending an average of $4,414 training each new employee, which is about 11% higher than the national average.
- Popularity of loyalty programs – Los Angeles restaurants have embraced loyalty programs more than ever before. Now, 81% of restaurants in the city offer a rewards program, which is an 11% increase from the year prior.
- Social media engagement – Twitter and Facebook continue to be the most popular social media platforms for restaurant promotion in Los Angeles, with Twitter taking the lead. Instagram is third in terms of popularity among restaurateurs.
The 2023 Los Angeles State of Restaurants provides more in-depth insights that operators are using to succeed in this coming year. It can be downloaded for free at touchbistro.com/blog/la-state-of-restaurants-report. The national State of Restaurants report is also available for free download at touchbistro.com/blog/state-of-restaurants-report.