Puerto Rico restaurant industry grew 51.5% in 2nd half of 2023
The Puerto Rico Restaurants Association (ASORE, in Spanish) recently collaborated with the consulting firm Inteligencia Económica to present its 2024 projection study, which highlights the strategies restaurants are using to address challenges and shows growth of 51.5% in the second half of 2023.
It also identifies opportunities for the restaurant industry and its suppliers, and provides economic impact projections for 2024. Inteligencia Económica’s founder and president, Gustavo Vélez, and senior economist Chantal Benet, conducted the study.
“At ASORE, we are committed to anticipating and preparing for the future challenges of our industry,” stated ASORE President Carlos Budet. “With the presentation of the 2024 projections study, we aim to offer our partners and the sector a clear and strategic vision for navigating a constantly changing market.”
Key findings of the report for Puerto Rico’s restaurant industry include: a notable sales increase, with a 51.5% rise in the second half of 2023 compared to the first, and a 57.4% increase from the previous year, indicating the industry’s “recovery and strength.”
Moreover, the study points out an increase in operational and energy costs, with 54.7% of restaurants experiencing a significant increase in energy expenses, ranging between 10% and 20%. This surge poses a substantial challenge to the cost-effectiveness and operational efficiency of restaurants.
Regarding the sector’s workforce, it has about 2,609 vacant positions, underscoring the necessity for effective recruitment and retention strategies.
The Inteligencia Económica team conducted the study by surveying 209 participants representing 1,069 establishments, including 39 distributors and 170 restaurants, ranging from casual dining, fine dining and fast food service to cafeterias and bakeries.
In response to the study’s findings, Budet commented, “These results drive us to continue fortifying our strategies and find creative solutions to overcome obstacles, with the goal of ensuring the healthy and sustainable development of the entire restaurant industry in Puerto Rico.”
Other notable findings from the 2024 projections study include: restaurant profit margins ranging from 5% to 16%, with most between 8% and 12%.
Additionally, while 85.5% of respondents raised prices (3% – 5%) in the past year, there’s a slight decrease from the previous year’s 91%, suggesting a stabilization in pricing. Also, 63.5% of respondents reported that more than 50% of their transactions are made with credit cards, emphasizing the relevance of digital payments in the industry.
Meanwhile, labor costs and minimum wage hikes are seen as the primary challenges for businesses. Yet, despite industry caution, 76% of respondents hold a positive business outlook for 2024.
“These findings underscore both the challenges and opportunities for the industry,” Vélez noted. “It’s vital for restaurants to continue to adapt and react to these trends to thrive in the current economic climate.”
Furthermore, Budet urged the government and relevant entities to collaborate in nurturing a fair and sustainable business environment that supports the entire restaurant industry.
“We are at a critical moment for our industry, and it is imperative that we work together to ensure that our restaurants not only endure but also flourish in 2024 and beyond,” Budet concluded.
