Despite Improved 2024 Outlook, Labor, and Other Risks May Drag Restaurants Down

The U.S. restaurant industry will continue to shake off the aftereffects of the pandemic in 2024, but that doesn’t mean the challenges that remain are easily dispelled. 

Even though cooling inflation is a positive, it’s still running ahead of the Federal Reserve’s 2 percent target and has not yet resulted in relief on costs. Stubbornly high interest rates also keep operators squeezed by the cost of money, both long-term debt and revolving credit lines.

But the leading drag on the industry are its labor woes. The persistent shortage of people is aggravated by inflationary pressures on wages combined with complications of new minimum pay requirements. Another growing risk: nuclear verdicts over dram shop law violations, driving up the costs of liquor liability insurance.

Those restaurant organizations that closely monitor and manage such existing and emerging risks will be best positioned to ride out the turbulence. Here’s an overview.

Dealing Better with Labor PainsThe…