Despite the lingering effects of what the National Restaurant Association calls a “perfect storm” of economic challenges – notably the housing correction and rising gas and energy prices – the NRA’s 2008 Restaurant Industry Forecast says signs point toward some growth in the U.S. economy. While continuing strain on consumer pocketbooks is expected, the key indicators of restaurant performance – gross domestic product, disposable personal income, and jobs – should post modest gains in 2008. Foodservice locations are predicted to ring up an estimated $558 billion in sales, +0.9% in inflation-adjusted terms from 2007. The most dramatic growth (+3.2%, adjusted for inflation) is projected for snack and non-alcoholic beverage bars, the fastest growing sector for several years. Quickservice and fullservice sales increases are expected to be modest (+0.8% and +0.7% in real terms respectively). While the NRA predicts a slowdown in the rise of wholesale food prices (+1.3% vs. +7.4% in 2007), food costs will remain elevated. This, along with rising energy costs, means menu prices are projected to increase +3.6%, slightly above the expected inflation rate of +2.5%.
Overall, recruiting, and retaining employees top the list of challenges cited by both fullservice and quickservice operators for 2008. Within fullservice, this is especially true of casual dining operators. Among family dining operators, equal numbers cited recruiting/retaining employees and competition as their top challenge; for fine dining operators, it was building and maintaining sales volume. In terms of spending, food safety/security and training will continue to be important. Technology is a higher priority for quickservice than for fullservice – over half (55%) in quickservice say they plan to allocate a larger proportion of their budget to tech in 2008, compared to about one third (30%) in fullservice.
Some tech investment in quickservice may go to customer-activated ordering terminals, which 83% of quickservice operators surveyed said will become more popular (though offered by only a fraction). Dollars will also go to wireless Internet access, which 91% of operators said will gain popularity, as will digital/video menu boards (83%), and online ordering (69%). Technologies gaining favor in all segments of fullservice will also include wireless Internet access, which about one-third of adults surveyed said they would likely to use in a fullservice restaurant. Slower to catch on in fullservice are electronic ordering and payment at the table. Only 1% of operators offer electronic ordering and more than 80% don’t believe it will become more popular. But a significant number (44%) of fullservice customers would be interested. They could take it a step further – about the same number (46%) said that if available in their favorite sit-down restaurant, they would be likely to place an order online, schedule a time to arrive, and have their food come out shortly after they were seated. Fullservice customers are also enthusiastic about electronic payment at the table, with over half (53%) saying they would be likely to utilize it. Already established in 57% of family, 49% of casual, 33% of fine dining restaurants, the sale of food items is also predicted to be more popular, as is the sale of merchandise.
What’s on the menu: a survey of 1,200 chefs nationwide found that top trends include small portions of desserts and entrees, locally grown and organic produce, specialty sandwiches, craft/artisan/microbrew beer, sustainable seafood, grass-fed items, energy drink cocktails, and specialty salts. (For more info, or to purchase the Forecast, go to restaurant.org/forecast.)
