There’s plenty of opportunity, but the choppy economy poses some challenges for restaurant operators.
Hudson Riehle, SVP of research and knowledge at the National Restaurant Association, addressed a crowd of analysts and investors in a keynote presentation at the 2016 Piper Jaffray Consumer Conference in June.
For the good news, he said the industry stands to grow by $37 billion in top-line sales in 2016, a 5 percent increase from 2015 to $783 billion. Some of that is inflation, some is ticket price increases, but there is a real 2.1 percent increase in restaurant spending expected. But there is bad news, too.
Consumers now spend just 13 percent of their income on food, according to the Bureau of Labor and Statistics. They spend 33 percent on housing, 17 percent on transportation and 11 percent on insurance and pensions. Spending on food is up just 3 percent, according to the bureau, far behind healthcare at a 12 percent annual growth rate, and education at 19 percent.
A stream of horrifying news events this summer and the November election only make consumers more jittery.
According to monthly sales and guest count tracking service Knapp-Track, that contributed to a very soft June with same store sales down 2.3 percent and guest counts down 4.8 percent.
Still, consumers want to eat out. In fact, 45 percent of adult consumers want to eat out more, according to the 2016 Restaurant Trends Survey from the NRA. That represents a 14 percent increase from 2007 to 2016.
“When you talk about one in two adults wanting to eat out more, talk about potential,” said Riehle.