Foodservice Operators Project Moderate Growth for 2018

Operators seem cautiously optimistic when looking ahead to 2018.

Overall, 58 percent of foodservice operators anticipate their sales will increase in 2018, according to FE&S’ 2018 Operator Forecast Study. Among those operators projecting an increase, the average growth rate is 2.38 percent.

In addition, 33 percent of operators project their 2018 sales will be in line with this year’s revenues, and only 9 percent anticipate a decrease in sales for the coming year.

Commercial Operators Project Stronger Sales, Gross Profits

Screen-Shot-2017-11-30-at-10.26.20-AMFrom a sales perspective, 65 percent of commercial operators project an increase in sales for 2018, which is 9 percentage points more than non-commercial operators.

When it comes to gross profit, 47 percent of commercial operators project an increase for 2018, compared to 38 percent of noncommercial operators.

While the perspectives differ by segment, both commercial and non-commercial operators cite the same labor-related issues as the top three factors affecting gross profits: wages, finding qualified help and cost of benefits. In fact, 63 percent of operators project labor costs to increase in 2018 at an average rate of 7 percent.

Anticipated Equipment Budgets

In terms of 2018 foodservice equipment and supplies budgets, 38 percent of commercial operators project their expenditures will remain the same as in 2017, while 58 percent and 4 percent project their expenses to be the same and decline, respectively. Looking at noncommercial operators, only 28 percent project an increase in their 2018 foodservice equipment and supplies expenditures, while 60 percent expect their budgets to remain consistent with this year. And 12 percent of non-
commercial operators expect their equipment and supplies budgets will decline in 2018.

Among those operators projecting an increase in their equipment and supplies expenditures for 2018, the average growth rate is a modest 2.19 percent, encompassing both the commercial and noncommercial segments.

Along those lines, 63 percent of operators plan to replace an existing piece of foodservice equipment in 2018, 
43 percent plan to renovate their kitchens and 32 percent plan a dining room renovation, per FE&S’ 2018 Operator Forecast Study.

Foodservice Operators Report on 2017

For the most part, 2017 has gone as expected for most foodservice operators participating in FE&S’ 2018 Operator Forecast Study. In fact, 54 percent of operators report sales meeting their expectations thus far, compared to only 10 percent who report lower than expected sales. Thirty-four percent of operators report sales meeting their expectations, thus far.

Once again, commercial and noncommercial operators are split on their perceptions of the year to date. Specifically, 15 percent of commercial operators report sales did not meet their expectations thus far in 2017 compared to only 6 percent of noncommercial operators.

Interestingly, 58 percent of operators project their 2017 sales will eclipse last year’s revenue levels, while 32 percent project their sales will be flat compared to 2016. Only 10 percent of operators project a decrease. Among those operators projecting a sales increase, the average growth rate is 3.42 percent, up 0.08 percent from last year’s forecast study.