We have much to be thankful for as we begin a new year. In 2019, consumers’ disposable income grew which helped the restaurant industry report encouraging sales numbers. Food costs remained stable and technological advancements soared, both of which contributed to smoother and leaner operations. With threats of a recession always on the radar, the industry must prepare for the worst, address their inefficiencies, and lean into the unknown. Let’s begin by looking at the issues we’re facing and see how they will impact our financial outlook in the new decade.

Labor Costs

Restaurants have always accepted the costs of high turnover, but labor shortages and rising minimum wages are increasing overall labor costs. National unemployment is under 4%, so restaurants are having a difficult time filling their backs-of-house with quality workers. These labor shortages are affecting other segments of the supply chain as well, including warehousing and transportation. Driver shortages are estimated to be a sticking point in 2020 which will add to food and supply costs. Additionally, many states are raising their minimum wages to as high as $15 per hour, skyrocketing the costs of both tipped and salaried employees.

Consumer Demand

Restaurants may need to shift gears to capture consumer demand. In 2019, we saw increased interest in healthier options, organic produce, humane animal treatment, and sustainable practices. Farm-to-table restaurants can easily capitalize on this growing trend, and other restaurants can take a piece of the pie by sourcing new local producers, varying their menu offerings, and adjusting marketing efforts accordingly.

Big Data

Our industry is embracing big data and the insight it can provide. By learning consumers’ habits, restaurants have a better chance at standing the test of time. Data analytics can be used to optimize pricing, estimate demand, perfect menu selections, support marketing efforts, and improve the customer experience.


As the industry grows, so does the competition. To remain competitive, restaurants must balance food quality with perceived value and offer customer service diners expect. In addition to these cornerstone principles, restaurants are embracing new technologies to meet customers’ expectations. Consumers are looking for interactive ordering experiences, delivery options, a strong social media presence, and websites or apps that aid in ordering decisions.

Commodity Prices

Commodity prices may increase as global demand for livestock rises and extreme weather affects crops all over the world. Although global meat consumption is on the rise, North America is placing emphasis on organic produce, locally produced ingredients, and allergen-friendly alternatives. Restaurants that import food or supplies from overseas will need to hedge their bets on how international tariffs – even in other sectors – will affect international trade as a whole. And of course, the cost of biofuels will remain a wildcard for 2020. Fortunately, data analytics can help restauranteurs anticipate price changes, and they can utilize technology to help them update their supply chains quickly and efficiently.

Mergers and Expansions

The fast-casual and casual restaurant markets are oversaturated, and at a time when consumers are favoring local, hip spots, larger franchises are consolidating and buying out smaller companies to achieve better economies of scale. We expect these mergers to continue into 2020. Restaurants that have managed to hold onto their fan base may consider expansion in 2020, but those that do should tread lightly. Translating a restaurant experience from one region to another is difficult and not as straightforward as you may think.

2020 Outlook

Work with your business advisors to prepare yourself for the decade ahead. Here are some things you should be thinking about.

New Technologies

Technology will only make a difference if your employees are ready to embrace it. Learn what technologies you can implement to improve your performance in 2020. Do you need to digitize your ordering software? Have you considered an app to take online orders? Are you installing technology that can monitor your equipment and alert you when upgrades are needed? Does your POS accept a wide variety of cashless payment options, and does it talk to and coordinate with your back-office software?

Consumer Habits

How are you tracking consumer behavior, and what are you doing with that information?


Take a step back and look at your process from a bird’s eye view. Where can you cut costs? What monthly duties do you dread? Is your staff at peak performance?

Willingness from Management

Are you coaching your managers to be better leaders and to bring out the best in their employees? An employee-centric culture starts at the top, and when it’s done right, it will produce high-quality workers and less turnover.


Capitalize on the diners who make it into your restaurant. Have you taught your team to upsell? Are they making customers feel welcome? Is there a way they can customize the experience for the diner?


How are you standing out above the crowd? Are you providing incentives so customers return to your restaurant? Is your ordering process fun and unique?


Are you actively managing your online presence? Are there changes you can make to your website or social media pages to improve the look and feel of your restaurant?

Employee Satisfaction

What back-of-house technologies are you implementing to make your employees’ lives easier? Have you talked to your workers recently? What are they struggling with, and what can you do to keep them happy?


As a restauranteur, you have your work cut out for you in 2020, but with the right planning, you can make it through this recession scare and out the other side even stronger. Bring up the above talking points with your business advisor and your co-owners and see what changes can be made to prepare for the new decade. If you have questions about the trends outlined above, or need assistance with an audit, tax or other issue, GBQ can help. For additional information call us at 614-221-1120 or click here to contact us.


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Tags: Operations