The operating environment (for many businesses) will remain challenging in the coming year, however “record sales are expected in the restaurant industry” according to the National Restaurant Association (NRA).
Earlier this month the NRA published its annual Restaurant Industry Forecast for the coming year. Overall, the outlook is good for, “America’s 980,000 restaurants which will continue to be a leading job creator in 2013.”
Here are some of the news highlights from the NRA report:
Total restaurant industry sales are expected to exceed $660 billion in 2013 – a 3.8 percent increase over 2012, marking the fourth consecutive year of real sales growth for the industry.
2013 will be the 14th straight year in which restaurant industry employment will outpace overall employment.
Restaurants will employ 13.1 million individuals next year as the nation’s second-largest private-sector employer, representing 10 percent of the total U.S. workforce.
The NRA expects restaurants to add 1.3 million new positions in the next decade, pushing industry employment to 14.4 million by 2023.
Every $1 spent in Illinois restaurants generates an additional $1.25 in sales for the state economy. More Illinois stats here.
Despite expected growth projections for 2013, operators will continue to face a range of challenges. The top challenges cited by restaurateurs vary by industry segment, and include food costs, the economy and health care reform.
Wholesale food costs will continue on an upward trajectory through 2013, putting significant pressure on restaurants’ bottom lines; about one-third of sales in a restaurant goes to food and beverage purchases.
Sluggish economic and employment recovery impacts consumers’ cash-on-hand situation, which in turn impacts restaurants.
There is a strong correlation between consumers’ disposable income and restaurant sales; 2 out of 5 consumers say they are not using restaurants as often as they would like.
The implementation of health care reform 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. Significant increases in these costs will result in additional cost management measures to preserve the already slim pre-tax profit margins of 3-5 percent on which most restaurants operate.
Consumers’ interest in technology continues unabated. Restaurant operators recognize that technology can enhance customer service and appeal to consumers, but have yet to fully meet consumer demand yet.
Among the strongest consumer trends for 2013 are local sourcing and nutrition. More than 7 out of 10 consumers say they are more likely to visit a restaurant that offers locally produced menu items.
More than 7 out of 10 consumers also say they are trying to eat healthier at restaurants now, than they did two years ago.
For more facts and figures go to http://www.restaurant.org/.
We wish you a very, Happy, Healthy & Prosperous New Year!