Texan Restaurateurs Faced with Rising Food Costs and Lower Profit Margins Struggling to Keep Menu Prices Down

“Dallas and Houston State of Restaurants” report from TouchBistro finds sales volume recovering to only 73% and 65% of pre-pandemic levels, respectively.

DALLAS & HOUSTON--(BUSINESS WIRE)--The 2023 Dallas and Houston “State of Restaurants” reports released today by TouchBistro reveal that restaurant sales have recovered to only 73% of pre-pandemic levels in Dallas and just 65% of pre-pandemic levels in Houston. Both cities have also seen a significant increase in the cost of food and other expenses. In Dallas, this has had a significant impact on the bottom line, causing the average profit margin for the city’s full service restaurants to fall to 10.3%, which is below the U.S. average of 10.6%

“After contending with the worst of the pandemic, many restaurants had their sights set on a more successful recovery, but it’s been a mix of highs and lows,” says Samir Zabaneh, CEO of TouchBistro. “Now, as the restaurant industry enters another year characterized by economic instability and change, many restaurants are once again preparing to adjust the way they run their businesses. While restaurant guests are feeling the bite of higher menu prices, restaurant owners are working hard to keep prices down so that it is not cost prohibitive for guests to continue enjoying the dining venues and foods they love.”

Highlights from the 2023 Dallas and Houston State of Restaurants Reports:

• Restaurateurs in Dallas report raising menu prices by an average of 16% in the past six months, while those in Houston reported raising menu prices by an average of 15%.
• Restaurateurs in Dallas and Houston report spending 46% and 41% more, respectively, on food costs on average compared to the year prior – figures that are in line with the national average. Across the nation, fresh fruits and vegetables have seen the biggest increase, followed by meat and seafood.
• Nearly all Dallas and Houston restaurateurs say they are short staffed, with most operators saying they are short about four to five staff members on average. To attract new staff, 67% of Houston’s restaurateurs say they offer higher wages to stay competitive. In contrast, 49% of operators in Dallas say they use staff scheduling software to keep labor costs under control.
• In Dallas, chefs are in the highest demand, with chef shortages up 17% from the year prior. In contrast, restaurateurs in Houston report that bartenders are the toughest role to fill. Bartenders are also increasingly hard to find across the rest of the U.S.

Key Dallas and Houston restaurant trends in the report:

• Online ordering is an essential sales channel – On average, Dallas restaurants are now processing over a quarter (27%) of their sales through online ordering platforms. Even though Houston restaurateurs report processing relatively fewer sales through online ordering platforms, 20% of their total business still comes from online orders. DoorDash is the most popular online ordering platform in Dallas, while UberEats is the most popular in Houston. Direct online ordering through a restaurant’s website is the platform of choice for 23% of Dallas restaurateurs, but in Houston, only 8% use commission-free online ordering solutions.
• Staff training costs vary wildly – Restaurateurs in Houston report spending an average of $2,937 to train each new employee, which is about 25% lower than the national average. In contrast, restaurateurs in Dallas report spending an average of $4,412 to train a new employee, which is 10% higher than the national average.
• Rising popularity of loyalty programs – Dallas and Houston restaurants have embraced loyalty programs more than ever before. Now, 81% of restaurants in Dallas and 69% of restaurants in Houston report offering a rewards program.
• Social media engagement – Twitter and Facebook continue to be the most popular social media platforms for restaurant promotion in both Dallas and Houston. In Dallas 61% use Facebook and 51% use Twitter. In Houston, Twitter takes the lead with 80%, closely followed by Facebook at 77%. TikTok and Instagram are a distant third in terms of popularity in both cities.

The 2023 Dallas and Houston State of Restaurants Reports provide more in-depth insights that operators are using to succeed in this coming year. The Dallas Report can be downloaded for free at https://www.touchbistro.com/blog/dallas-state-of-restaurants-report/ and the Houston Report can be downloaded for free at https://www.touchbistro.com/blog/houston-state-of-restaurants-report/. The national State of Restaurants report is also available for free download at touchbistro.com/blog/state-of-restaurants-report.

About The State of Restaurants Report

Now in its fifth year, the study was conducted by research firm Maru Matchbox on behalf of TouchBistro in September 2022. More than 600 full service restaurant owners and operators were surveyed across all 50 states with an added focus on six key cities: Dallas, Houston, New York City, Los Angeles, Chicago, and Miami. Survey results are accurate +/- 4% 19 times out of 20. Detailed findings are available at: Maru Public Opinion US.

About TouchBistro

TouchBistro is an award-winning restaurant management system that makes running a restaurant easier by providing essential front of house, back of house, and guest engagement solutions and POS, on one powerful platform. TouchBistro helps restaurateurs streamline and simplify their operations, increase sales, and deliver a great guest experience. For additional information, visit TouchBistro.com.