Houlihan Lokey – U.S. Restaurant Industry Update, Winter 2024

The Winter 2024 U.S. Restaurant Industry Update highlights key trends and insights. Restaurants with clear value propositions are poised for growth in 2025. Wage growth lagging behind inflation affects consumer spending and drives them towards concepts balancing value and quality. Food-away-from-home is more impacted by inflation, pressuring restaurant traffic. The Federal Reserve's rate cuts and improving economic indicators are expected to boost consumer confidence and benefit restaurant spending in 2025. Strategies for driving growth include price adjustments, loyalty programs, labor efficiency, and real estate flexibility. Chicken, coffee, smoothies, and ethnic cuisines are popular categories, especially among Millennials and Gen Z. M&A activity is increasing as high-growth concepts seek capital. Quick-service restaurants outperformed in Q3 earnings, emphasizing the importance of clear value propositions and differentiated concepts for success.