The restaurant economy heads up.
The National Restaurant Association predicts 2015 will be a year that builds on improving industry fundamentals for US restaurants.
The National Restaurant Association released their annual industry survey, highlighting emerging trends and challenges for the coming 2015 year. The actual report is a paid publication, but many details have been released by the NRA and by other media outlets.
Some of the headline news is encouraging. The NRA notes that "sales growth is expected to accelerate and represent the sixth consecutive year of real (inflation-adjusted) sales growth for the industry." Total industry sales are expected to advance 3.8%. That number is considered below the long-term trend, but is another uptick in the trend leading from the 2007 recession.
Of particular note is where the expected growth is likely to occur. Table-service restaurant sales are expected to post a 2.9% increase versus the 4.3% growth expected for the fast-casual/QSR segment. Good news on both fronts, but a difference of almost 50% for the fast-casual segment.
RISING GROWTH DESPITE HIDDEN DEMAND
Combined with the expected increase in sales, the NRA's survey reveals an interesting dynamic: that two out of five (40%) consumers are not using restaurants as frequently as they would like. This is, no doubt, partially due to the fact that the number of higher-income households remains below 2007 levels when adjusted for inflation.
But it's also likely a sign that consumers and industry are searching to find a new equilibrium - a 'new normal'. Anecdotally, much data shows that consumers want to eat outside the home more than ever but are employing strategies that lead them away from a traditional full-service model. This can range from picking up more to-go food or to purchasing prepared foods from a supermarket or convenience store more frequently - all with an eye towards stretching a budget or enhancing perceived value.
The industry may not be in ideal shape but conditions are as encouraging as they have been since the recession began in 2007. And the general rising trend should lift many boats, with additional upside opportunity available for operators able to tap into that reserved consumer demand.