Restaurant industry sales forecast, consumer confidence stats, off-premise dining stats and more — a recap of the latest data from the National Restaurant Association’s 2019 State of the Industry Report and its webcast on the state of current affairs.
Despite a host of ongoing challenges, the restaurant industry will hit a record high $863 billion in sales in 2019, per a forecast from The National Restaurant Association. This level of growth would represent a nominal increase of 3.6 percent from just last year. “That increase is more than double the North American box office sales for Hollywood,” said Hudson Riehle, senior vice president of research and knowledge for the NRA on its current affairs webcast.
The economy and national economic growth continues to remain positive. If 2019 does, in fact, result in real growth, it will mark the 10th consecutive year of positive sales, according to the NRA’s State of the Industry Report. Despite this momentum, the growth rate is still lower than in the pre-2007 recession years. But the industry remains resilient despite considerable headwinds. “That’s primarily because what constitutes a restaurant in America today is being rapidly redefined.” For example, a growing number of restaurant operators use commissary-style kitchens and only offer delivery or carryout.
Snack and non-alcoholic beverage bars (4.6 percent) were expected to have the highest sales growth this year, even greater than table service (3.8 percent) and quick-serve restaurants (3.2 percent), which indicates a shift in how and where consumers get their food.
Across the board, delivery sales are skyrocketing, with 72 percent of casual-dining operators reporting an increase, followed by 64 percent of fast-casual operators, 63 percent of family-dining operators, 55 percent of fine-dining operators and 49 percent of QSRs reporting an uptick in sales in this area compared to 2 years ago, per data from the NRA.
Further, a majority of fast-casual (62 percent), family and casual dining (both 61 percent) report increased to go orders compared to 2 years ago.
The typical restaurant experience today has some aspect of technology incorporated into it, whether that’s for convenience, speed of service or another tech component. This has come in the form of online, kiosk and tablet ordering, digital menu boards that operators can update in real time across multiple locations, POS platforms and more, Riehle pointed out.
Consumers became more cautious about the economy in early 2019 with 58 percent saying they felt the economy was in poor or fair shape. This was up 7 percent from the NRA’s survey in 2018. Interestingly, when asked about their outlook for the remainder of the year 30 percent of adults felt the economy would improve in the coming months and 30 percent said it would get worse. “They still have an uncertain frame of mind and that’s why it’s important for [operators] to continue to nudge consumers toward the decision to use foodservice,” Riehle said.
Despite an uncertain perspective on the economy, 36 percent of consumers surveyed in the report still say they do not use restaurants as much as would like on a daily basis. While that’s 9 points lower than 2013’s all-time high of 45 percent, this is still 12 percent higher than the all-time low of 24 percent, recorded in 2004 and 2005. Pent up demand remains highest in lowest income households, where people with income levels of less than $50,000 saying they would like to use restaurants more frequently, per the NRA study.
Declining customer traffic remains a challenge for all industry operators. At the same time, three out of every five employed adults don’t take a lunch break during the work week, according to data from the NRA. And 49 percent of adults report spending their lunch break doing something other than eating, like running errands and exercising. This reiterates the importance of looking for ways to continually nudge the consumer to eat out or make it easier for them to order, purchase and receive restaurant food wherever they are.
Consumers spend their income in a variety of ways, including increasing funds toward financial services, technology and transportation. “Competition is not only coming from within the industry but also from other industries, so it’s important to focus on getting those dollars into the foodservice arena,” Riehle said.
Thanks to technological advances and improved loyalty and customer data, however, restaurants have a unique advantage when targeting and tracking customers. The National Restaurant Association’s report pointed out that consumers with incomes of $70,000 or higher were responsible for almost 60 percent of restaurant spending. Demographics and location are even more important in determining a restaurant’s location than perhaps ever before.
Travel remains a key driver of foodservice use and after flat years in 2016 and 2017 international travel to the U.S. seems to be on the rise. Citing data from the U.S. Department of Commerce’s National Tourism Office, international to the U.S. was projected to increase by 5 million in 2018 and an additional 2 million for a total of 83.9 million visitors in 2019.
“When we talk to restaurant operators, we emphasize the importance of knowing the demographics of their patron base and how much is travel- and tourism-related,” said Riehle. He pointed out that 1 out of every 4 dollars in this country is tourism-related.
Out of the 140 items on the National Restaurant Association’s annual What’s Hot Culinary Forecast, the top five trends for 2019 were cannabis (CBD) related food and beverage; zero waste cooking; global inspiration and global flavors on kids’ menus.
Other three important trends, Riehle pointed out are eco-friendly, sourcing and global cuisine.