NRA seeks participants for 2013 Restaurant Industry Operations Survey

While last year’s business revenue and expenses are top of mind from this year’s tax season, the National Restaurant Association encourages restaurant operators to share some of that information in its new survey of restaurant operations.

 

In partnership with Deloitte & Touche LLP, the NRA has launched an update of its Restaurant Industry Operations Report, one of the industry’s most widely used tools to help restaurateurs gauge how their financial performance compares with operations of a similar profile.

The 2013 edition of the report will include valuable information to help operators sharpen their financial performance, detect potential problems, and measure data in new ways. The report will also have specifics by state and region, as long as the sample size is large enough – more operators participating in each state will lead to stronger breakouts of data when the report is published.

The report analyzes operations data for several restaurant profiles. Within each profile, the report also analyzes data by restaurant type, location, menu theme, sales volume and ownership. Cost categories match up with those presented in the NRA’s The Uniform System of Accounts for Restaurants.
Operators who complete the survey by May 31 will receive a free copy of the 2013 report, to be released later this year, as well as state- and region-specific data (sample size permitting).

Participants may also enter a drawing for one of three $500 gift cards.  Take the 2013 Restaurant Industry Operations Survey online.

Customers still seek value when dining out

When dining out, budget-conscious consumers continue to expect the best value for their money, the National Restaurant Association's 2013 Restaurant Industry Forecast has found.

Among operators polled, nine out of 10 said their customers were more value-conscious today than they were two years ago.

Hudson Riehle, Sr. VP
of the NRA's Research
& Knowledge Center

Furthermore, 79 percent of consumers questioned for the report's 2012 National Household Survey said they would consider dining out more often if menu prices were lower during off-peak times. In addition, a slightly higher proportion of frequent quick-service users and takeout dinner customers also said they might go out more often if prices were lower during off-peak periods.

"Offering reduced prices during off-peak meal times is potentially a good way to offer additional value to existing and new customers," said Hudson Riehle, senior vice president of the NRA's Research & Knowledge Center. "The ability for restaurant operators to shift some current as well as new customers to slower times of the day and week is a well-established practice in other consumer driven industries. In the years ahead, and aided by new technologies, more restaurateurs will consider and offer enhanced value propositions at nontraditional times."

Still, the operators surveyed had mixed opinions regarding whether off-peak dining at lower prices would become a trend. Approximately 60 percent of full-service operators said they thought it would, while just 39 percent of fast-casual and 33 percent of quick-service operators thought the trend would gain in popularity.

Consumer sentiment positive, bodes well for pinched restaurant industry

The National Restaurant Association (NRA) issued its 2013 Restaurant Industry Outlook earlier today, with the fitting theme of “2013: Finding Success in an Uncertain Environment.”

Average Americans, however, aren’t sweating the challenges that business owners will experience next year, according to the December Market Briefing Survey, “The Post-Election Mindset: Cautious Hope,”  by American Express. More than half of consumers surveyed said they expect the U.S. economy to brighten a great deal or somewhat in the next four years.  A brighter future means more restaurant visits.

Next year, Louisiana’s annual restaurant sales are projected to top $6.8 billion, a 3.6 percent increase over 2012’s $6.5 billion, according to the NRA. Nationwide collectively, the nearly one million restaurants will ring up a whopping $660.5 billion in sales, up from $379 billion in 2000.

When asked by Amex, “If your personal financial situation improves, how is that likely to influence your restaurant visits and spending?” 67 percent said they would visit restaurant in general more often. Thirty-seven percent said they would patronize full-service, sit-down restaurants more often.

With a sluggish economic recovery, all-time high food costs, the impending Affordable Care Act enforcement and the deadline looming to extend the Bush/Obama tax cuts to avoid the “fiscal cliff,” restaurants are bracing themselves for even tighter margins.

Making a profit is the goal of every restaurateur. If consumer spending increases, hopefully restaurateurs we’ll have a chance to break even despite the challenges ahead.

Restaurant industry will grow, outpace national job growth in 2013 despite sustained challenges

While the operating environment will remain challenging, America’s 980,000 restaurants are expected to post record sales and continue to be a leading job creator in 2013, according to the National Restaurant Association’s (NRA) 2013 Restaurant Industry Forecast released today. 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.

In addition, 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.

“Despite a continued challenging operating environment, the restaurant industry remains a strong driver in the nation’s economy,” said Dawn Sweeney, president and CEO of the National Restaurant Association. “Ours is a resilient and flexible industry that continually finds new ways to keep growing, relying on the creativity and innovation exhibited by the entrepreneurial spirit. In 2013, restaurant operators will continue to explore ways of navigating the rocky economic landscape to find the road to success.”

“The fact that the restaurant industry will continue to grow in an operating environment that presents substantial challenges is a testament to the essential role that restaurants play in our daily lives,” said Hudson Riehle, senior vice president, Research & Knowledge for the National Restaurant Association. “Restaurants are offering products and services that consumers actively seek out and enjoy; an activity in which consumers are selecting to engage despite cash-on-hand restraints because it is an important component of their lifestyle.”

Workforce Outlook
Total U.S. employment grew at a rate of 1.4 percent in 2012, while restaurants added jobs at a strong 3.0 percent rate – more than double the overall rate. In 2013, the NRA expects the restaurant industry to add jobs at a 2.4 percent rate, nearly a full percentage point above the projected 1.5 percent gain in total employment.

Looking ahead, the NRA expects restaurants to add 1.3 million new positions in the next decade, pushing industry employment to 14.4 million by 2023.

Because of this strong growth in restaurant employment, labor challenges will start to reemerge next year. Recruitment and retention, which was a top challenge pre-recession, will make its way back onto restaurant operators’ radar as the U.S. labor pool is starting to become shallower; restaurant operators in all segments expect recruitment and retention to be more challenging in 2013 than in 2012.

Challenges and Opportunities
While the restaurant industry is expected to grow in 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.

After increasing steadily in the last three years, wholesale food costs will continue on an upward trajectory through 2013, putting significant pressure on restaurants’ bottom lines as about one-third of sales in a restaurant goes to food and beverage purchases. Because of these prolonged cost pressures, restaurant operators will continue to use creativity and innovation to drive out cost inefficiencies and increase productivity to not pass along the increases to consumers at the same rate.

The sluggish economic and employment recovery impacts consumers’ cash-on-hand situation, which in turn impacts restaurants as there is a strong correlation between consumers’ disposable income and restaurant sales. There is currently substantial pent-up demand for restaurant services, with 2 out of 5 consumers saying they are not using restaurant as often as they would like; with improving economic conditions that demand is likely to turn into sales.

Preparing for 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, so significant increases in those 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.