Texas restaurant industry makes huge comeback since pandemic, passing $100 billion in annual sales

After enduring a challenging four years since the onset of the pandemic, Texas restaurants are finally experiencing a turnaround marked by two significant milestones.

The Texas Restaurant Association recently announced that the state’s food service industry has surpassed the $100 billion yearly sales mark for the first time, with 56,739 restaurant establishments generating $106.8 billion in annual sales in 2023.

“This is truly a story of resilience. It demonstrates our growth and remarkable staying power, even amidst economic adversities and the aftermath of the COVID-19 pandemic,” remarked Kelsey Erickson Streufert of the Texas Restaurant Association.

According to the latest figures from the U.S. Bureau of Labor Statistics, food service businesses in Texas employ 1,461,800 individuals, constituting 11% of the state’s total employment. This elevates the Texas food service industry to the position of the largest private employer in the state, surpassing even the healthcare sector.

“The resilience exhibited by Texas restaurants in the face of economic challenges reflects the growth mindset fostered by the Texas Restaurant Association,” stated Emily Williams Knight, Ed.D., president and CEO of the TRA. “Through legislative victories, cost-saving initiatives, and educational programs, we are demonstrating that the future for restaurants is promising when we work together.”

The National Restaurant Association, upon reviewing preliminary 2023 data from the U.S. Bureau of Labor Statistics, highlighted the following points:

– Foodservice businesses in Texas employ 1,461,800 individuals, with over 1.2 million working directly in restaurants.
– Small businesses continue to dominate the industry, with 91% of Texas restaurants employing fewer than 50 individuals.
– Texas boasts 56,739 restaurant locations contributing to $106.8 billion in annual sales.
– Restaurants play a significant role in bolstering the state’s economy, with every dollar spent in a Texas restaurant translating to a $2.35 contribution to the state’s economy.

This remarkable recovery comes in the wake of a devastating period for the industry during the pandemic-induced lockdowns that commenced in March 2020. Forced closures led to widespread job losses, severely impacting countless Texans.

“We faced an abrupt halt, akin to slamming on the brakes. However, we swiftly responded by collaborating with stakeholders to establish new norms and ensure safe operations,” explained Erickson Streufert. “We developed safety protocols under the Texas Restaurant Promise, coordinated with state authorities to implement gradual reopenings, and advocated for measures like alcohol to-go.”

Despite these positive developments, challenges persist for businesses. Factors such as rising costs, labor shortages, and supply chain disruptions continue to strain profit margins.

“For instance, in 2023, approximately a third of Texas restaurants operated at a loss, a sobering statistic,” Erickson Streufert noted. “The combination of inflationary pressures and existing debt from the pandemic exacerbates the situation, making it challenging for many establishments to remain viable.”

However, a recent survey conducted by the Texas Restaurant Association indicates that despite ongoing challenges, restaurants are making strides:

– While 64% reported increases in food costs and 58% faced higher labor expenses, 55% managed to maintain menu prices.
– Overall, 42% of restaurants experienced slight decreases in profit margins, while 12% reported significant declines.
– Despite these setbacks, restaurant operators expressed cautious optimism, rating their overall outlook at 58 on a scale of 1-100.

“While there’s no panacea for overcoming the challenges posed by the pandemic, our commitment to innovation, cost savings, and collaboration has guided us through this period,” emphasized Erickson Streufert.

As the industry navigates the road to recovery, the Texas Restaurant Association urges consumers to support local establishments.

“I urge consumers to be intentional and support the local businesses that matter to them,” urged Erickson Streufert. “Restaurants are integral to our communities, serving not only as employers and food providers but also as the heart and soul of our neighborhoods.”