NRA predicts 2014 will be the fifth consecutive year of growth for the restaurant industry.
The National Restaurant Association projects restaurant industry sales will top $683 billion in 2014, an increase at an adjusted rate of 3.6 percent from the $659.3 billion in sales for 2013. In real terms, the industry will grow 1.7 percent, according to the NRA.
The NRA projects sales for restaurants that provide table service will increase 2.6 percent to $212 billion. In real terms, this represents a 0.2 percent increase. Sales at limited service restaurants will increase to 4.4 percent on an adjusted basis to $195 billion, according to the NRA. This translates into a real growth rate of 2 percent.
If the industry moves forward at the forecasted rate, it will represent the fifth consecutive year of growth, according to the NRA's 2014 Restaurant Industry Forecast. While the restaurant industry continues to grow, it keeps doing so at a more moderate growth rate than it experienced prior to the start of the recession, according to Hudson Riehle, senior vice president, Research and Knowledge for the National Restaurant Association.
For example, the restaurant industry's compound aggregate growth (CAG) rate for the past 3 years is 3.8 percent, according to the National Restaurant Association. The industry's CAG was 4.2 percent for the past 10 years and it swells to 6.5 percent for the past 44 years, according to the NRA. "Despite facing a range of challenges, America's restaurants are showing continued resiliency and innovation," Riehle added.
One of the primary reasons that restaurant-industry sales growth hasn't fully taken off during the economic recovery is that consumers for the most part haven't broken out of their recession rut. Part of this is tied to modest improvements to the U.S. employment outlook. "Modest economic growth means modest employment and going forward that means cash on hand will remain constrained," Riehle said. "Consumer sentiment remains weak and that means it is up to the operator to incent them to use restaurants."
On a more positive note, Riehle pointed out that travel and tourism increased last year and seems poised to do so again in 2014. "Roughly one out of every four dollars spent in the restaurant industry is travel related and that will improve a little this year," he added.
Also, the NRA projects the number of restaurants will grow to 990,000 in 2014, an increase of 1 percent. "As the economic environment improves, there are more points of access on a net basis," Riehle said.
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