The Total Addressable Market (TAM) for Restaurant Management Software was valued at USD 4.20 billion in 2022. It is expected to reach USD 15.85 billion by 2031, growing at a CAGR of 15.9% during the forecast period (2023–2031). A restaurant management software, at its most basic, is a system that has all of the administrative and promotional elements needed to run a restaurant. It streamlines operations and marketing and takes care of order management, payment processing, and daily reconciliation. It can organize business using restaurant software, freeing up time to focus on enhancing the restaurant's reputation.
A modern restaurant management system has data security features to protect sensitive company data, streamlines internal processes, connects the individuals essential to the restaurant's success, and efficiently manages sales, labor, and inventory data. As a result, this raises sales, profits, and client satisfaction while lowering staff churn, order processing mistakes, wait times, and stress levels.
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Rising Demand for POS Technology
The market's expansion is anticipated to be fueled by the increasing use of mobile POS systems. Restaurants, bars, and other food service providers heavily rely on point-of-sale (POS) technology to keep track of sales, goods, operations, and inventory. Touchscreen ordering solutions are preferred to guarantee accurate customer orders. Most restaurants' IT budgets and investments typically go toward POS systems. Operators of restaurants look for creative ways to provide higher levels of customer satisfaction. For instance, mobile POS systems enable staff to spend more time interacting with customers on the sales floor rather than repeatedly visiting the kitchen and administrative areas. As a result, restaurants can develop a culture that is optimized for bettering the customer experience.
Integration of Software to Improve Customer Experience
Restaurant owners must comprehend customer expectations to deliver a better customer experience and stay ahead of the competition. A better customer experience is now possible in the restaurant sector thanks to digital transformation. Customers often prefer to pre-order food or make reservations online using web applications or mobile devices. Additionally, there has been a significant change in how customers pay for their meals. For instance, customers prefer using secured cards and making payments online.
The demand for restaurant management software solutions is anticipated to increase due to these shifting consumer trends. In addition, as smartphones and the internet increase and consumers' disposable incomes rise, demand for individualized and customized services from restaurants is expected to increase. As technology advances and virtual assistants, the internet of things, cloud-based solutions, and artificial intelligence become more widely used in restaurants, owners can provide the best customer service to keep patrons coming back for more.
Lack of Restaurant Management Software Integration
Various restaurant management software options are available from various vendors, which can simplify restaurant operations. Even though several vendors provide stand-alone restaurant solutions, these solutions still need to enable unified interaction with other systems already implemented by restaurants. As a result, restaurant owners have various systems running in the same operational environment with limited connectivity, limiting information sharing. This drives the demand for a unified software platform that can support all the critical software applications a restaurant needs or easily integrate with other well-known software solutions.
The lack of skilled workers to manage the operation of sophisticated software solutions and the lack of awareness of the advantages of centralized restaurant management software are additional factors that limit market expansion. Many well-known eateries in developing nations continue to operate using conventional restaurant management techniques. Additionally, restaurants face financial pressure due to the escalating competition in the F&B sector and the rise of cloud kitchens, kiosks, and cafes, which makes them hesitant to invest in a centralized software platform.
The global restaurant management software market is segmented by software, deployment, and end-user.
Based on software, the global restaurant management software market is bifurcated into front-end software, accounting and cash flow, purchasing and inventory management, table and delivery management, and employee payroll and scheduling.
The front-end software segment is the highest contributor to the market and is expected to grow at a CAGR of 14.8% during the forecast period. The user interface of the restaurant management software that is used or operated by the user directly is referred to as the front-end software. Due to the difficulty of manually managing a restaurant business, many restaurant owners look for top-notch software. Such software's interactive and simple user interface enables users to provide adequate customer services with minimum clicks. As a result, the front-end software market is expanding quickly.
The quality of the food must always be maintained in the restaurant industry. Restaurant owners ensure that the right amount of food ingredients are available from their suppliers to maintain food quality. As a result, they need a robust purchase management system that streamlines the restaurant's inventory and purchasing processes and promotes business profitability. Furthermore, a significant factor supporting segment growth is anticipated to be the growing demand for placing orders with multiple suppliers to get the best deals.
Based on deployment, the global restaurant management software market is bifurcated into cloud and on-premise.
The cloud segment owns the highest market share and is expected to grow at a CAGR of 19.3% during the forecast period. In recent years, cloud-based restaurant management software has become more popular globally. This software uses a remote network of internet-hosted servers to process, manage, and store data. Cloud-based software adoption has increased due to the benefits it offers restaurant owners. Cloud-based software allows restaurant owners to connect and integrate with smart devices, access data from anywhere, pay lower upfront costs, improve scalability, and enhance data security. It integrates with the restaurant's POS. A cloud-based POS tracks sales, billing, inventory, and recipes. It offers recipe management software, online ordering, kitchen displays, and email marketing.
The physical server of a restaurant serves as the conduit for the on-premise restaurant management software solution. Due to its on-site location, the restaurant has total control over the server's operation and database. Restaurants that are large or full-service and have significant assets and sensitive data prefer to use on-premise software solutions configured to adhere to compliance standards and applicable laws. Data security concerns are an essential factor influencing the growth of on-premise software adoption. On-premise restaurant management solutions are necessary for eateries in remote areas with poor internet access. However, this market is anticipated to expand at a moderate rate over the anticipated period due to the increased awareness of cloud-based solutions and their benefits over on-premise software.
Based on end-user, the global restaurant management software market is bifurcated into full-service restaurant (FSR), quick-service restaurants (QSR), and institutional.
The quick-service restaurants (QSR) segment is the highest contributor to the market and is expected to grow at a CAGR of 17.6% during the forecast period. The quick service restaurant (QSR) industry has long been known for its high-quality food and efficient customer service. However, QSR owners rely heavily on technology to meet customer demands due to rising customer expectations for simple and appealing services. Customers of QSR expect accurate, individualized, and customized dining experiences.
Additionally, restaurant managers must be adept at increasing upsells and streamlining inventory control. As a result, QSR business owners make wise investments in restaurant management software that satisfies the requirements of their users, staff, and, their clients. This has led to an increase in the need for centralized applications. Therefore, the quick uptake of intelligent technology encourages QSR owners to invest significantly in restaurant management software that controls inventory and staff and offers customers a satisfying dining experience.
Full-service restaurants spend money on technology to provide quick and efficient customer service. These restaurants offer an extensive menu, various courses, and plenty of tools for running their businesses. Restaurant management software providers offer various solutions tailored to their needs because they constantly need updated technologies. The National Restaurant Association of the United States estimates that in 2021, the full-service restaurant sector will generate more than USD 250 billion. Full-service restaurants are constantly willing to invest in technology that can help them streamline their operations, demonstrating the segment's potential to generate revenue. As a result, the market's stakeholders have access to a wide range of opportunities from the segment's rapid growth.
The global restaurant management software market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North America Dominates the Global Market
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North America is the most significant shareholder in the global restaurant management software market and is expected to grow at a CAGR of 14.2% during the forecast period. Rapid urbanization, well-organized nature of the food service sector, rising disposable income, and high market penetration of vendors are all factors that have contributed to regional market growth. The major players in the Quick Service Restaurants (QSR) market, including McDonald's Corporation, Starbucks Corporation, and Domino's Pizza, Inc., are increasing their investments in expressway and airport infrastructure and constructing new QSR pavements across the United States. Furthermore, the region's QSR segment is expanding thanks to the presence of well-known QSR chains and the wide availability of various cuisines. The rapid increase in fast food consumption in Canada is a key market driver for entrepreneurs.
Europe is expected to grow at a CAGR of 15.3% during the forecast period. The growth of the regional fast-food market is anticipated to pick up speed in the coming years due to rising spending on food eaten away from home (FAFH), an increase in the number of fast-food chains, restaurants, and hotels, and an expanding middle-class population. The demand for Point-of-Sale (POS) solutions and other customer-centric products and services is anticipated to fuel the growth of the German restaurant management software market. In addition, the regional government is launching initiatives to promote electronic payments to achieve its economic and social objectives. The suppliers of cutting-edge POS software are taking advantage of this chance to present a simple and safe cashless payment platform. The UK is quickly transitioning to a cashless society. This is anticipated to increase the use of mPOS terminals and payment wallets, favoring regional market expansion.
Asia-Pacific is expected to grow significantly over the forecast period. The region's market has grown due to the rising demand for improving customer experience and using POS software. Since restaurant owners are implementing cloud-based POS systems to increase operational efficiency, the region will likely present potential opportunities for POS system vendors. Restaurants in nations like China, India, and Japan are implementing software technologies that let patrons use their smartphones and other devices to place orders and make payments at the table. Additionally, several restaurants provide discounts and cash-back deals for customers who pay with plastic cards, luring them to go cashless. This will probably encourage the expansion of the local market. Governments from several of the region's nations are making efforts to develop the hospitality sector to spur economic growth by luring tourists from abroad, which is anticipated to fuel market expansion over the long term.
Large restaurants in Brazil prefer integrated approaches that include restaurant management software, which supports a range of restaurant management operations, from the point of sale (POS) to specialized enterprise resource planning (ERP). A popular option in big-chain restaurants is the POS system, which provides multiple specialized functions on a single comprehensive platform. The market is anticipated to grow due to the rising demand for customer-centric solutions and cost-effective and value-added services. Several regional vendors are firmly focused on providing cutting-edge solutions and services to their clients, helping the Mexican market expand.
The expansion of QSR restaurants, the rising appeal of western cuisine, and shifting work habits are all factors in the growth of the Middle East and African market. Growing urban lifestyles, rising tourist numbers, increased casual dining, and changing consumer preferences in places like Abu Dhabi and Dubai have contributed to casual dining growth.
The global restaurant management software market’s major key players are Fiserv, Inc., Personica (Fishbowl Inc.), Fourth Enterprises LLC, Jolt, NCR Corporation, OpenTable, Inc., Oracle Corporation, Revel Systems, Square Capital, LLC, and TouchBistro.