LOS ANGELES, USA – 2023 was a year of mixed performance for the global restaurant industry. While restaurants generally recovered from pandemic-era losses, record-breaking inflation took a bite out of many eateries’ profit margins.
Now more than ever, restaurant tech is critical to help eliminate redundant costs and maximize returns on every order served. That’s what more than 275,000 businesses have been doing with Otter’s Restaurant Operating System.
The report provides the most vital (and most timely) data points for the success of today’s restaurants across the United States and Canada. The team at Otter analyzed this data to uncover key strategies that will help restaurants stand out and manage their bottomline in the new year.
Read on to see the top 5 key takeaways, and download the full report below for more tips on how to set your restaurant up for greater success in 2024.
What the report covers
1. Top-ranked delivery cuisines of 2023
Eaters know what they like when it comes to ordering food delivery. Not only have the top ten cuisine types remained the same year-over-year across the U.S. and Canada, but the number of locations with these cuisine offerings keeps growing, as well. The cuisines with the highest year-over-year growth were coffee (29.6%) and desserts (20.2%). Consider expanding your coffee and dessert offerings in the new year to capitalize on this growth!
2. Top locations and growth rate for online delivery
Across the board, the number of restaurant locations went up by 20% from 2022 to 2023. This is great news in parallel with the return to the pre-pandemic restaurant workforce. Restaurants are making a slight comeback even amidst the challenges of inflation and staffing shortages.
California has 87,000 storefront locations, making it the state with the highest number of locations, followed by Texas (78K) and Florida (57K). Wyoming has 1,400 storefronts, the lowest number of locations. On average, a state has 16,000 restaurant storefronts. If you’re in one of these more populated states, it’s even more critical to find ways to stay ahead of the competition and grow your customer base. Virtual brands or delivery app promotions are a great way to do exactly that.
3. How to convert your customers into loyal guests
Looking to get more orders? When it comes to loyal customers, 4 is the magic number! A customer needs to place 4 lifetime orders, after which they have more than a 50% chance of reordering within 30 days. Even more—after a customer orders 12 times, they then have a 75% chance of reordering within 30 days!
Having a social media presence and posting consistently is a great way to ensure you’re staying top-of-mind with existing customers and reaching new ones. Plus, you can put your online ordering link directly in your bio to generate more commission-free sales.
4. The benefits of virtual brands
Adding your first virtual brand to your business can increase your orders by 24.1%. Sounds like a no-brainer, right? You can use your existing resources and space to expand what you’re already doing with the goal of driving more sales.
5. How to keep your cancellation rates down
Reducing cancellations is critical to your restaurant’s success and directly correlates with your restaurant rankings. The average order cancellation rate for restaurants in 2023 is between 1.5-3%. This means that a restaurant that collects $10k in weekly revenue loses between $150 and $300 per week due to canceled orders. To help prevent canceled orders, make sure your online menus are up to date, and keep business hours on your website and apps accurate, as well.
Make 2024 your restaurant’s best year yet
You don’t have to wait until the new year to upgrade your business and enhance your restaurant tech stack, but it’s always a helpful time to start. Otter does much more than just order aggregation. With a next-generation POS system, direct ordering channels, in-app promotions and more, Otter is the Restaurant Operating System designed to help you succeed all year round.
Source: Results based on publicly available information of online stores in major delivery platforms and typical Otter customer performance from Jan 2022 – Nov 2023.
