Restaurant industry enters 5th consecutive year of sales growth, will continue strong job creation despite challenges

National Restaurant Association’s 2014 Restaurant Industry Forecast Reveals Economic, Workforce and Consumer Food and Technology Trends

2014 will mark the fifth consecutive year of restaurant industry sales growth despite a continued challenging economic landscape, according to the National Restaurant Association’s 2014 Restaurant Industry Forecast released today. Industry sales are projected to exceed $683 billion in 2014, up 3.6 percent from 2013’s sales volume of $659.3 billion.

 

For the complete NRA 2014 Restaurant Industry Forecast, including graphics and video, visit Restaurant.org/Forecast.

2014 also will mark the 15^th straight year in which restaurant industry employment growth will outpace overall employment growth. The industry will continue to be the nation’s second-largest private employer with 990,000 restaurants employing 13.5 million individuals, or about 10 percent of the total U.S. workforce.

“As our nation continues its road to recovery, the restaurant industry will remain a key driver of economic growth and a leading jobs creator,” said Dawn Sweeney, president and CEO of the National Restaurant Association. “Restaurants touch every community across the U.S., and 2014 will be a year of growth and innovation as the industry focuses on inspired new ways to meet consumer demand while providing valuable careers to millions of Americans.” 

“Despite facing a range of challenges, America’s restaurants are showing continued resiliency and innovation,” said Hudson Riehle, senior vice president, Research & Knowledge for the National Restaurant Association. “As the industry enters its fifth straight year of real sales growth, operators are feeding consumer appetites with new technology, customer loyalty efforts, and evolving menu options. Consumers currently have a historically high pent-up demand for restaurant services, which is likely to translate into a business boost as the economy continues to improve – and our nation’s foodservice operators are rising to the challenge.”

Workforce Outlook

The NRA expects eating-and-drinking places to add jobs at a solid 2.8 percent rate in 2014, a full percentage point above the projected 1.8 percent gain in total U.S. employment.

The restaurant workforce grew at a robust rate in 2013, keeping the industry among the economy’s leaders in job creation. Eating and drinking places added jobs at a strong 3.3 percent rate in 2013 outpacing total US employment which grew at 1.6 percent.

While every state is expected to see their restaurant industry workforce expand during the next decade, states in the southern and western regions of the United States will continue to lead the way in 2014. Arizona and Texas are projected to set the pace with restaurant-and-foodservice job growth above 15 percent between 2013 and 2023. Florida (15.0 percent), Nevada (14.7 percent) and Georgia (14.4 percent) are also expected see their restaurant employment base expand at rates well above the national average during the next 10 years. 

Challenges and Opportunities

While the restaurant industry is expected to grow in 2014, operators will continue to face a range of challenges. The top challenges cited by restaurateurs include food costs, labor costs, and the economy.

After increasing steadily in the last four years, wholesale food costs will continue to be elevated through 2014, putting significant pressure on restaurants’ bottom lines as about one-third of sales in a restaurant goes to food and beverage purchases.

Virtually all operators across the industry (limited-service and tableservice restaurants) saw labor costs as a primary challenge in 2013, and that will continue in 2014. Challenges with ACA implementation and minimum wage increases across the country have made a significant impact on restaurant bottom lines, as typically one-third of restaurant sales is spent on labor.  

One of the primary reasons that restaurant-industry sales growth hasn’t fully taken off during the economic recovery is that consumers for the most part haven’t broken out of their recession rut. When asked in December 2013 to rate the current state of their own personal finances, nearly six out of 10 adults described their finances as either fair or poor and among those adults, nearly one-half said they are very concerned about the economy and have cut back significantly on spending. 

Despite spending cutbacks, consumers have substantial pent-up demand for restaurant services with two out of five 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.

Consumer Trends

Technology innovation continues to play a vital role within the industry. Nearly one-fifth of consumers say technology options are an important feature that factors into their decision when choosing a fullservice restaurant; 24 percent of 18- to 34-year-olds say they consider a restaurant’s technology options when selecting where to go, compared to 11 percent of individuals age 65 and over.

Similarly, more than one-fifth of consumers say technology options factor into their decisions when choosing a limited-service restaurant; 33 percent of 18- to 34-year-olds, compared to 7 percent of those 65-plus.

To keep up with the evolution of consumer palates, restaurant operators across segments added new food and beverage menu options throughout 2013 and will continue to do so in 2014.

Local sourcing and nutritious options (such as healthful kids’ meals, gluten-free) continue to be the top trends throughout the industry.

Eight out of 10 of consumers say restaurants offer more healthy menu options now compared to two years ago, and seven out of 10 say they are more likely to visit a restaurant that offers healthy options.

Environmental sustainability is a long-term trend among operators and consumers.  Nearly three out of five consumers say they are likely to make a restaurant choice based on its eco-friendly practices.

Registration for the 2014 NRA Public Affairs Conference is open

The Louisiana Restaurant Association (LRA) consistently delivers one of the top state delegations to the annual National Restaurant Association (NRA) Public Affairs Conference in Washington, D.C. Last year, nearly 50 LRA members made the trip to meet with Louisiana’s Congressional Delegation. This year, the NRA Public Affairs Conference is April 29-30 at the Ronald Reagan Building and International Trade Center.

Stan Harris, LRA President and CEO

“Every year, the NRA holds the conference to provide restaurateurs with their state’s Congressional Delegation,” said Stan Harris, LRA President and CEO. “During the LRA Hill Climb, our members meet with all nine of Louisiana’s delegation to discuss priority issues for the restaurant industry.”

The restaurant industry is facing unprecedented challenges on a variety of legislative fronts from health care and taxes to minimum wage and immigration reform. This year will be a critical mid-term election year for restaurateurs large and small. Congress needs to know how all of these issues affect your and your employees. Join hundreds of industry peers and colleagues for two days in Washington, DC.

“Advocacy plays such an important role in our business,” said Melvin Rodrigue, COO of Galatoire’s Restaurant. “We’re all concentrating on what’s happening within our four walls, but we have to be aware of what’s outside, such as regulations on the city, state and federal level.”

The NRA Public Affairs Conference is open! Early bird registration is $165; $185 after March 28; and Spouse or non-business guest is $90. Click here to register online and to see the list of hotels nearby. View the agenda here.

Learn about the issues, talk with colleagues and share your story with Congress. They need to know that America Works Here. 

A message from LRA President/CEO Stan Harris

As the New Year gets underway, we have much to be grateful for in Louisiana. Our industry employs nearly 200,000 people and that number is projected to grow by nearly 25,000 by 2022. With the increase of visitors to our state and the support of our residents, the Louisiana restaurant industry is projected to achieve 2014 sales in excess of $7 billion for the first time. This is astonishing given that in 2004, our industry’s annual economic impact was just $4.2 billion. That’s a 40 percent increase in just nine years.   

The National Restaurant Association recently released its 2014 What’s Hot Culinary Forecast with locally sourced meats and seafood topping the list. The Louisiana Restaurant Association's work with fisheries issues and the Share the Gulf Coalition align closely with these initiatives. Other trends include locally grown produce, environmental sustainability, healthful kids’ meals and gluten-free cuisine.

To assist you in these areas, the NRA has three programs that you might consider—ServSafe Allergens, Kids LiveWell and Conserve. ServSafe Allergens is a 90-minute online training course to provide your management or chefs in how to serve the 15 million guests with food allergies safely. Kids LiveWell is a program focused on offering healthy options for kids when dining in your restaurant. It meets specific caloric, portion and fat contents. If you agree to participate in Kids LiveWell, your restaurant can be listed on the Kids LiveWell website that provides a resource to consumers seeking healthier options. Conserve is a free online resource to initiate and inspire actions that improve a company’s bottom line, but also are good for people and the planet. Be sure to visit the NRA’s Manage My Restaurant portal for more insightful tips to effective and efficient restaurant operations.

In addition, the LRA offers ServSafe Manager (the DHH mandated eight-hour training course in food safety and sanitation) and ServSafe Alcohol Online (the ATC mandatory two hour training course is available online for the first time in Louisiana). Visit the LRA website here to learn more about ServSafe.

The LRA Self Insurer’s Fund for Workers’ Compensation is pleased to return more than $2 million in surplus dividends in April 2014. They will be distributed to eligible members during the April LRA Chapter events. If you aren’t participating in the LRA SIF for your workers’ compensation needs, please allow us to quote your business. We can quote your workers’ comp directly through one of our LRA regional sales representatives or through your agent.

Finally, we know that as you operate your restaurant that employee issues create unique challenges. The LRA retains the firm of Fisher & Phillips to provide guidance and assist with any questions, concerns or problems you may be facing. Please call the LRA office and we will connect you with an attorney who can guide you through any employee questions. Utilizing this resource in advance usually produces good dividends in the form of a happy, engaged workforce.

We are here to help you become more successful and profitable in 2014 and beyond.

Happy New Year,

Stan Harris

New Orleans Will campaign unveiled

Hospitality industry advocacy campaign rallies local support of tourism, city’s economic engine that creates a better quality of life for every New Orleans citizen

New Orleans leaders gathered today to share information on NEW ORLEANS WILL, an advocacy campaign designed by the New Orleans Convention& Visitors Bureau (NOCVB) to rally the community and educate residents on the significance of tourism to their lives. The event was held to begin enlisting locals in what will develop into a powerful grassroots movement. 

Tourism is a $6 billion dollar industry for New Orleans, creating more than 78,000 jobs and careers for citizens in every neighborhood. In 2012, nine million people visited the city and they spent a record $6 billion dollars.

“You might not work in tourism, but tourism works for you,” said Stephen Perry, President and CEO of NOCVB. “Tourism is the cultural steward of New Orleans. Our residents in a relatively small city are able to live as if we're a city of millions in terms of our cultural richness and the assets (museums, restaurants, cultural attractions, festivals) given to us by the tourism industry. Because of tourism, New Orleans is the most famous mid-sized city in the world.”

The event gathered myriad business leaders and tourism officials in an unassuming floral warehouse surrounded by bright green foliage. 

“We gathered at Convention Plant Creations today to unveil the NEW ORLEANS WILL campaign because this is just one of the many businesses working behind the scenes and keeping our tourism industry humming,” said Mark Romig, President and CEO of New Orleans Tourism Marketing Corporation. “You might drive by this place every day without ever noticing it. But there are hundreds of businesses like this across the city who depend on tourism directly to feed their families and put roofs over their heads.”

NEW ORLEANS WILL was created to demonstrate the connection between every citizen and tourism. While started by the NOCVB, the plan is for the campaign to become a grassroots movement that lives on in perpetuity, inspiring locals to take pride in their hometown and support its top industry – tourism.

Virtually everyone in New Orleans depends on tourism, whether it be because of the revenues it generates to support the city services that improve local quality of life or because of the ripple effect that carries visitor dollars throughout the community.

“While I don’t have any direct connection to the tourism industry, I know that my business depends on it,” said Dr. Christy Valentine, owner of Valentine Medical Center, a primary care facility in New Orleans. “I saw the impact of tourism on my practice first-hand during the BP oil spill. With the drop in visitation after the spill, my patients who rely on tourism for their paychecks were out of work. Healthcare was suddenly a luxury expense these patients just couldn't afford anymore and my revenue went down. It was an eye-opening experience.”

Residents are encouraged to take action and join the NEW ORLEANS WILL movement! To do so, visit www.neworleanswill.com and sign up to receive a complimentary WILLPOWER PACK, which contains campaign materials, including a lapel pin, bumper stickers, poster and yard sign. 

Healthful foods, child nutrition tops on NRA's trends survey

Providing more healthful and flavorful menu options for children has ranked as a top culinary trend in the National Restaurant Association’s 2014 What’s Hot Culinary Forecast.

According to this year’s survey about 1,300 professional chef-members of the American Culinary Federation, whole grains, fruits, vegetables and oven-baked items all ranked as top trends in the category of kids’ meals. This year’s respondents further noted they make strong efforts to ensure their dishes and recipes are more healthful.

Additionally, the survey determined that in the categories of healthful dining and child nutrition, five trends in particular ranked as Top 20 trends overall. They were:

4. Healthful kids’ meals
7. Children’s nutrition
12. Whole grain items in kids’ meals
13. Health and nutrition
19. Fruits and vegetables as children’s side items

“The What's Hot survey confirms the enthusiasm we are hearing from chefs and restaurants participating in the Kids LiveWell program,” said Anita Jones-Mueller, founder and president of Healthy Dining., the California-based nutrition consultant and co-creator of the NRA’s Kids LiveWell child nutrition initiative. “The Kids LiveWell choices emphasize lean proteins, fruits, vegetables, whole grains and low-fat dairy -- the ingredients that help our nation’s children grow, thrive and be their best.”

Thomas Macrina, the ACF’s national president, agreed, saying, “The American Culinary Federation chefs who took part in this survey understand that…ongoing efforts to provide more healthful foods –especially for children benefits everyone. Chefs recognize that nutrition is a vital component of the foodservice industry, and constantly revise and update recipes to reflect the concerns and desires of a diverse group of consumers who are looking for good food choices to best meet their nutrition and other needs.”

Joy Dubost, the NRA’s director of nutrition and healthy living, added that the information contained in this year’s survey is encouraging because “it shows this is a true trend and not just a fad.”

NLRB won't pursue poster rule

The National Labor Relations Board won’t pursue efforts to require businesses to display a large poster advising employees of their rights to unionize, handing a major victory in the two-year legal battle to restaurants and other industries that had challenged the rule.

The NLRB announced yesterday that it wouldn’t seek Supreme Court review of an earlier court decision striking down the rule, which stated that most private-sector businesses would have to hang an 11x17 notice of unionization rights in the workplace, and that failure to do so would be considered an unfair labor practice.

In May, the U.S. Court of Appeals for the District of Columbia struck down the rule, claiming it violated businesses’ right to free speech. The court denied the NLRB’s petition for a hearing on the case in September. Previously, a federal court had ruled that while the NLRB could impose the requirement, it could not label employers’ refusal to display the poster as an unfair labor practice.

After the NLRB attempted to enact the rule in November 2011, the National Restaurant Association and 30 state restaurant associations, including the Louisiana Restaurant Association, filed comments asking the NLRB to withdraw the mandate, calling it a tool to make it easier for unions to organize. The NRA and other business groups filed a lawsuit challenging the rule as part of the Coalition for a Democratic Workplace. In the lawsuit, the groups argued that the NLRB did not have the authority to impose the mandate on businesses.

Louisiana Congressmen experience the story behind Drago's Restaurant

Bipartisanship may be rare in Washington, D.C., but it’s alive and well in Louisiana. Two members of Congress, Rep. Steve Scalise (R-La.) and Rep. Cedric Richmond (D-La.), found they had a lot to agree about on Dec. 6, when National Restaurant Association Director Tommy Cvitanovich hosted the pair at his family’s famous Drago’s Seafood Restaurant in Metairie, La. Scalise and Richmond got a glimpse of how a restaurant operates, from vendor relations all the way to the dining room.

The congressmen were introduced to several restaurant staff members and vendors, with Cvitanovich noting the important role each plays in the success of Drago’s. He told the congressmen stories of several staff members who have overcome adversity to become valuable, contributing members of the Drago’s team.

Stan Harris, Louisiana Restaurant Association (LRA) President and CEO, pointed out that the personal stories of success within the restaurant industry, at all levels, are a valuable tool in advocacy.

“Congressman Scalise and Congressman Richmond, when we go talk to them, are always interested in the ‘people stories,’ of how our industry connects to what’s going on,” Harris said. “We are the largest employer in the state of Louisiana. [The restaurant industry] employs over 10 percent of the people here. It’s a good group of people, and when you work for people who care about you, and know your story…that’s what helps us personalize [the industry] for them.”

Scalise spoke of the importance of the restaurant industry to New Orleans and how it teaches hard work and discipline for those who enter and work up the ladder.  The restaurant industry, he said, plays a vital role in allowing leaders to see how their decisions in Washington affect numerous stakeholders.

“This is the small business story that you always hear about,” Scalise said. “Our restaurants are the classic, epitome of what a small business is. When you look at our delegation…you hear a lot about the partisanship in Washington, and it’s very real, unfortunately, there are a lot of people who just don’t like working with someone who’s from a different party…Cedric and I will vote differently on a whole lot of stuff, but when it comes to things that are important to our restaurants here in New Orleans, the policies and things that allow you to keep doing what you’re doing to serve us great food, we love working together to get that done.”

The restaurant industry is a critical part of the New Orleans culture, Richmond said.  It’s the friendly culture of the city, he said, that drives tourism. The opportunity for growth that small businesses like Drago’s provide is a main reason why people who grow up in New Orleans choose to stay there, he said.

“The fact that you all have the ability to come to a place with great leadership, that gives you the chance to work hard and stay here, you’re not looking for the next opportunity because you know if you stay here and work hard, [Cvitanovich] and his family are going to nurture you, watch you grow and watch you succeed. You can’t say that about a bunch of places, but you can say that about Drago’s,” Richmond said.

The Drago’s Seafood Restaurant tour was organized through the NRA’s Congressional Visit Program, a member advocacy initiative that connects restaurateurs with their federal lawmakers.  Helping legislators understand the stories behind our industry is a powerful advocacy tool and demonstrates how policies enacted in Washington can affect small businesses in their home districts and states.  For more information or to host your own congressional visit, contact Jon Simons at jsimons@restaurant.org or 202-331-5907.