Food services and drinking places, annual, 2023

Released: 2025-02-18

Food services and drinking places report all-time high in operating revenue in 2023, while profit margins get squeezed

Operating revenue for the food services and drinking places subsector rose 12.5% to $95.0 billion in 2023. Revenue for the subsector was over one-fifth (+21.2%) higher compared with 2019, before the COVID-19 pandemic.

Sales of food and non-alcoholic beverages accounted for 86.6% of total sales in 2023, with alcoholic beverages making up 10.5% and other sales accounting for the final 2.8%.

Operating expenses for the food services and drinking places subsector rose 13.3% year over year to $91.6 billion in 2023, pulling the operating profit margin down to 3.6%. This represents the lowest profit margin since 2003 (3.2%), highlighting the growing impact of cost pressures on the subsector over the past few years. The higher costs have resulted in a 25.0% increase in prices of food purchased from restaurants as of December 2023, compared with December 2019. This is notably higher than the all-items price increase of 16.1% over the same period.

In 2023, the cost of goods sold continued to be the largest operating expense for the food services and drinking places subsector, accounting for 35.7% of the total. Salaries, wages, commissions and benefits (33.4%) were the second-largest expense, followed by rental and leasing costs (8.3%).

Operating revenue of full-service restaurants grows more than that of limited-service eating places for the third straight year, but still trails compared with before the pandemic

Operating revenue at full-service restaurants rose 13.4% year over year to $43.6 billion in 2023, outpacing the growth rate of limited-service eating places (+10.4% to $41.7 billion).

While 2023 marked the third consecutive year of stronger growth for full-service restaurants, the industry's growth rate of 21.9% since 2019 still lagged behind that seen in the limited-service eating places industry (24.7%).

Pandemic restrictions had a far greater impact on full-service restaurants, which saw a 33.1% decline in operating revenue in 2020, compared with a 12.0% drop for limited-service eating places.

Special food services and drinking places report the strongest growth rates within the subsector

Operating revenue for the special food services industry group, representing food contractors, caterers and mobile food services, rose 18.6% year over year to $7.0 billion in 2023. This was the first year in which revenue exceeded that reported in 2019, as the industry has slowly rebounded from the significant year-over-year drop in operating revenue in 2020 (-48.3%).

Similar trends were reported in the drinking places industry group, where operating revenue increased 17.0% to $2.8 billion in 2023. Following a significant year-over-year drop in revenue in 2020 (-49.4%), 2023 marked the first year operating revenue fully rebounded since pandemic restrictions were lifted.

Looking ahead

This subsector is also covered by the Monthly Survey of Food Services and Drinking Places. As of the November 2024 monthly release, operating revenue had grown 4.2% for the first 11 months of 2024, compared with the same period in 2023. This smaller increase appears to signal the end of the post-pandemic growth phase, since the subsector has now recovered to pre-pandemic levels. Detailed financial statistics will be published after data collection later in 2025.

Contact information

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