The restaurant industry is projected to exceed $660 billion in 2013, a 3.8% increase over 2012, marking the fourth consecutive year of real sales growth for the industry, according to the National Restaurant Association’s 2013 Restaurant Industry Forecast. While the operating environment will remain challenging, America’s 980,000 restaurants are expected to post record sales and continue to be a leading job creator in 2013.
“Despite a continued challenging operating environment, the restaurant industry remains a strong driver in the nation’s economy," said Dawn Sweeney, president and CEO of the National Restaurant Association (NRA). “Ours is a resilient and flexible industry that continually finds new ways to keep growing, relying on the creativity and innovation exhibited by the entrepreneurial spirit. In 2013, restaurant operators will continue to explore ways of navigating the rocky economic landscape to find the road to success."
The report noted while the industry is expected to grow in 2013, the top challenges cited by restaurateurs vary by industry segment, and include food costs, the economy and health care reform.
After increasing steadily in the last three years, wholesale food costs will continue on an upward trajectory through 2013, putting significant pressure on restaurants’ bottom lines as about one-third of sales in a restaurant goes to food and beverage purchases. Because of these prolonged cost pressures, restaurant operators will continue to use creativity and innovation to drive out cost inefficiencies and increase productivity to not pass along the increases to consumers at the same rate.
The sluggish economic and employment recovery impacts consumers’ cash-on-hand situation, which impacts restaurants as there is a strong correlation between consumers’ disposable income and restaurant sales. There is currently substantial pent-up demand for restaurant services, with 2 out of 5 consumers saying they are not using restaurant as often as they would like; with improving economic conditions, that demand is likely to turn into sales.
Preparing for the implementation of health care reform also will put additional cost pressure on some restaurant operators in the near future. One-third of a typical restaurant’s sales go toward labor costs, so significant increases in those costs will result in additional cost management measures to preserve the already slim pre-tax profit margins of 3% to 5% on which most restaurants operate.
When it comes to food, the top menu trends are all about local sourcing and nutrition. Nearly three-quarters of consumers are more likely to visit a restaurant that offers locally produced food items, and more than 60% of consumers said locally sourced menus are a key attribute for choosing a restaurant. Currently, a majority of tableservice restaurants offer locally sourced produce, meat or seafood, with availability being highest in the fine dining segment.
In addition, more than 7 out of 10 consumers say they are trying to eat healthier at restaurants now than they did two years ago; women more so than men (75% versus 66%). Similarly, about three-quarters of consumers say healthy menu options are an important factor when choosing a restaurant (80% of women versus 71% of men). Restaurants are responding to this increasing demand for nutritious options, as 86% of consumers say that restaurants are offering a wider variety now than two years ago.
“Despite a continued challenging operating environment, the restaurant industry remains a strong driver in the nation’s economy," said Dawn Sweeney, president and CEO of the National Restaurant Association (NRA). “Ours is a resilient and flexible industry that continually finds new ways to keep growing, relying on the creativity and innovation exhibited by the entrepreneurial spirit. In 2013, restaurant operators will continue to explore ways of navigating the rocky economic landscape to find the road to success."
The report noted while the industry is expected to grow in 2013, the top challenges cited by restaurateurs vary by industry segment, and include food costs, the economy and health care reform.
After increasing steadily in the last three years, wholesale food costs will continue on an upward trajectory through 2013, putting significant pressure on restaurants’ bottom lines as about one-third of sales in a restaurant goes to food and beverage purchases. Because of these prolonged cost pressures, restaurant operators will continue to use creativity and innovation to drive out cost inefficiencies and increase productivity to not pass along the increases to consumers at the same rate.
The sluggish economic and employment recovery impacts consumers’ cash-on-hand situation, which impacts restaurants as there is a strong correlation between consumers’ disposable income and restaurant sales. There is currently substantial pent-up demand for restaurant services, with 2 out of 5 consumers saying they are not using restaurant as often as they would like; with improving economic conditions, that demand is likely to turn into sales.
Preparing for the implementation of health care reform also will put additional cost pressure on some restaurant operators in the near future. One-third of a typical restaurant’s sales go toward labor costs, so significant increases in those costs will result in additional cost management measures to preserve the already slim pre-tax profit margins of 3% to 5% on which most restaurants operate.
When it comes to food, the top menu trends are all about local sourcing and nutrition. Nearly three-quarters of consumers are more likely to visit a restaurant that offers locally produced food items, and more than 60% of consumers said locally sourced menus are a key attribute for choosing a restaurant. Currently, a majority of tableservice restaurants offer locally sourced produce, meat or seafood, with availability being highest in the fine dining segment.
In addition, more than 7 out of 10 consumers say they are trying to eat healthier at restaurants now than they did two years ago; women more so than men (75% versus 66%). Similarly, about three-quarters of consumers say healthy menu options are an important factor when choosing a restaurant (80% of women versus 71% of men). Restaurants are responding to this increasing demand for nutritious options, as 86% of consumers say that restaurants are offering a wider variety now than two years ago.
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