Are Full Service Restaurants Staying Profitable in 2019?
While there are a ton of nuances to consider when looking at the profitability of a restaurant – how long it’s been open, what’s happening with import tariffs, when the next minimum wage hike is coming, etc. – profit margin is still the first place to look when you want to see how the business is doing.
For the U.S. restaurant industry, the financial news is good news.
Our restaurant industry analysis for 2019 revealed that full service restaurants (FSRs) in the U.S. have an average profit margin of 11% – that’s incredible!
While profit margins grow as restaurateurs get more experience in the industry, we found that margins actually max out at 11% after five years of experience – even as an FSR’s annual revenue continues to grow.
What does this mean for you?
Well, 11% may be the benchmark to aim for. As you optimize your operations and grow your business, you can set 11% as your target profit margin and use that number as a high-level measure of success.
Your point of sale (POS) is the main hub of your restaurant operations, helping you track sales, forecast labor needs, manage inventory, and so much more.
When it comes to choosing the right POS, our report found that restaurateurs use three factors to decide:
Ease of use
For processing transactions, we found that cash, credit, and debit payments are almost universal across FSRs in the U.S. However, restaurants are increasingly accepting mobile payment options like Apple Pay, Google Pay, and Samsung Pay, with 18% set up to accept all three.”
It’s important to work with a payment processor that lets you offer this range of payment options. However, our restaurant industry analysis for 2019 also revealed that four in five restaurateurs are frustrated with their payment processors, citing lack of pricing transparency and POS integration as their top complaints.
No two restaurants are completely the same. Different cities, different food, different people – these all add up to unique restaurant DNA.
But our restaurant industry report reveals that many restaurateurs are dealing with similar challenges and finding success with similar strategies. These present perfect opportunities to learn from the experiences of fellow restaurateurs so the industry as a whole can continue growing, in 2019 and beyond.
This study was conducted by Maru Matchbox research firm on behalf of TouchBistro.
The results come from surveying over 500 full service restaurant owners, managers, and presidents/CEOs from all 50 U.S. states. Included in this number was an increased focus on six major cities: New York City, Chicago, Los Angeles, Miami, Austin, and San Antonio. The research was conducted in December 2018.
Dana is the former Content Marketing Manager at TouchBistro, sharing tips for and stories of restaurateurs turning their passion into success. She loves homemade hot sauce, deep fried pickles and finding excuses to consume real maple syrup.