Restaurant Industry - National Restaurant Association

Transcription

2014
Restaurant Industry
Forecast
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©2014 National Restaurant Association. All rights reserved.
THE INTERNATIONAL
FOODSERVICE MARKETPLACE
MAY 17-20, 2014
McCORMICK PLACE • CHICAGO, IL
The restaurant industry is a
powerhouse in the U.S. economy.
W
ith sales of more than $683 billion, nearly
one million locations and a workforce of
13.5 million, restaurants serve as
cornerstones in every community. While a range of
challenges still exist for restaurant operators across
segments, dining out remains one of America’s
favorite pastimes, ensuring that the industry will
continue to grow.
We are pleased to provide our annual outlook of
restaurant industry opportunities and challenges for
the year ahead. The 2014 edition of this report is
divided into sections by topic that you may review
separately or combine to provide a comprehensive
overview of the full industry. This format provides a
more flexible way to note the latest trends while
preserving the wide scope of our respected flagship
research report.
The National Restaurant Association provides
comprehensive support on all fronts for the industry’s success — from political advocacy to business
services to original research — and to help our
members build customer loyalty, rewarding careers
and financial success.
The National Restaurant Association’s research is
recognized as the industry’s most authoritative
source for restaurant industry projections and trends,
based on analysis of the latest economic data and
extensive surveys of restaurateurs and consumers.
We continually monitor the latest data and conduct
new research to keep you up-to-date on the trends
that affect the operating environment. For more
information and analysis, visit Restaurant.org/
Research.
We look forward to continuing to serve our
industry with research and insights that will help
improve business in 2014 and beyond.
Sincerely,
Dawn Sweeney
President and CEO
National Restaurant Association Hudson Riehle
Senior Vice President,
Research & Knowledge
Shared Vision of the National Restaurant Association, National Restaurant Association
Educational Foundation and State Restaurant Associations:
We will lead America’s restaurant industry into a new era of prosperity, prominence and participation,
enhancing the quality of life for all we serve.
NRA MISSION
NRAEF MISSION
We exist to help our members — the cornerstone of
their communities — build customer loyalty, rewarding
careers and financial success.
As the philanthropic foundation of the National
Restaurant Association, we exist to enhance the
restaurant industry’s service to the public through
education, community engagement and the
promotion of career opportunities.
National Restaurant Association | Restaurant.org/Forecast
1
Introduction
The National Restaurant Association each year prepares a comprehensive
overview of and outlook for the restaurant industry. The NRA’s research is
considered the most authoritative source for restaurant industry sales projections
and trends. It is based on analysis of the latest economic data and extensive
surveys of restaurant operators and consumers. See the inside back cover for
notes on methodology, and visit Restaurant.org/Research for additional industry
trends and analysis.
The 2014 edition of this report is divided into six parts by topic: Sales and
Economic Forecast, Workforce Outlook and Trends, Tableservice Trends, LimitedService Trends, Technology Trends, and Food and Menu Trends. These chapters
can be used separately, or combined into a 360-degree view of the U.S. restaurant
industry in 2014.
Restaurant Industry 2014
Sales &
Economic
Forecast
Workforce
Outlook &
Trends
Tableservice
Trends
Limited-Service
Trends
Technology
Trends
Food & Menu
Trends
The NRA’s research and analysis have a long-standing reputation of the highest
credibility, neutrality and accuracy both inside and outside the industry. It is considered a leading authority on industry statistics, analysis and trends. Proceeds from
research publications are applied to conducting additional industry research.
This report was prepared
by the National Restaurant
Association Research
and Knowledge Group:
Hudson Riehle
Senior Vice President,
Research & Knowledge
Bruce Grindy
Chief Economist
Annika Stensson
Senior Manager,
Research Communications
2014 Sales & Economic Forecast................................................................................................................ 3
Workforce Outlook & Trends........................................................................................................................ 17
Tableservice Trends.......................................................................................................................................... 23
Tim Smith
Art Director
Limited-Service Trends................................................................................................................................... 31
Technology Trends........................................................................................................................................... 37
Food & Menu Trends........................................................................................................................................ 43
2055 L Street, NW,
Suite 700
Washington, D.C. 20036
NationalRestaurantAssociation
@WeRRestaurants
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© 2014 National Restaurant Association. All rights reserved. The National Restaurant Association logo is a trademark of the National
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2
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Restaurant.org
ISBN 978-1-931400-86-2
Restaurant Industry Set
For Sales Growth Despite
Cautious Consumer Mindset
B
the fifth consecutive year of real growth in
restaurant sales, the gains remain below what
would be expected during a normal post-recession
period.
In the immediate aftermath of the previous
four recessions, the restaurant industry registered
at least three consecutive years of real sales gains
above 2 percent. In the four years that followed the
Great Recession, real sales growth topped out at
1.7 percent. The expectation for 2014 is more of
the same.
olstered by a stronger economy and
historically high levels of pent-up demand
among consumers, restaurant-industry
sales are expected to hit a record high in 2014.
According to the National Restaurant Association’s
2014 Restaurant Industry Forecast report, restaurant-and-foodservice sales are projected to total
$683.4 billion in 2014, up 3.6 percent from 2013’s
sales volume of $659.3 billion.
In inflation-adjusted terms, sales are projected
to increase 1.2 percent in 2014, up from a 1.0
percent gain in 2013. Although 2014 will represent
$683.4
BILLION
Projected restaurant
industry 2014 sales volume
44 Years of Restaurant Industry* Sales
The chart shows growth in the number of dollars spent each year in the restaurant industry, as well as real
(inflation-adjusted) sales growth.
12.8%
Current Dollar Growth: 3.6%
Real (Inflation-Adjusted) Growth: 1.2%
2014
12.4%12.3%
11.8%
11.5%
11.6%
10.8%
9.9%
9.2%
7.7%
8.4%
8.0%
8.3%
7.9%
7.2%
6.1%
6.9%
5.1%
4.7%
4.2%
4.2%
2.9%
3.4%
2.8%
2.1%
2.7%
2.3%
1.2%
1.7%
1.5%
1.0%
1.0%
0.8%
0.5%
-0.1%
2.2%
1.6%
1.5%
1.2%
3.0%
3.2%
2.1%
2.0%
1.6%
1.2%
3.6%
3.5%
3.0%
3.0% 2.9% 3.0%
4.4%
4.7%
4.5%
4.2%
2.5%
-0.2%
4.2%
4.6%
4.6%
2.1%
1.6%
4.8%
5.3%
4.4%
3.2%
5.3%
5.3%
5.0%
4.0%
3.8% 3.8%
3.0%
3.0%
5.5%
5.3%
5.8%
5.0%
4.4%
6.2%
5.8%
6.6%
1.2%
0.5%
-0.2%
-0.6%
-0.9%
-3.0%
1971
1975
Current dollar growth
1979
1983
1987
1991
1995
1999
2003
2007
2011
2014
Real (inflation-adjusted) growth
*The National Restaurant Association defines the restaurant industry as that which encompasses all meals and snacks prepared away from home, including all takeout meals and beverages.
Source: National Restaurant Association
3
GOOD NEWS:
Consumers are relatively
optimistic that personal
financial conditions
will improve in the
year ahead.
Stuck in a Recession Mindset
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 of 10 adults described
them as either fair (38 percent) or poor (20 percent).
Less than one of 10 adults said their personal finances
were in excellent condition.
The responses to the same question were almost
identical in December 2010, when the economy had
just begun to add back some of the almost 9 million
private sector jobs that were lost during the recession.
Flash forward three years and nearly 7 million jobs
later, and consumers remain stuck in the same
mindset.
Not surprisingly, this negativity is directly impacting consumers’ willingness to spend. Among the adults
who described their personal finances as either fair or
poor, nearly one-half (46 percent) said they were very
concerned about the economy and had cut back
significantly on spending. Forty-one percent of these
consumers said they had cut back somewhat on
spending until the economy improves, while only 13
percent had not cut back at all.
Among consumers who said their personal finances
were in either excellent or good condition, only 17
percent said they had cut back significantly on
spending, while 39 percent had not cut back at all.
Reasons for Optimism
Although consumers’ assessment of their personal
economy remains mixed, they are relatively optimistic
that conditions will improve in the year ahead.
Thirty-five percent of adults say they think their
household financial situation will be better in 2014
than it was in 2013, while only 11 percent expect
things will get worse.
While an improving financial situation will
enhance consumers’ general ability to spend, survey
data also suggests that restaurants will likely be the
beneficiaries of some of this increased spending. The
NRA asked consumers in December 2013 if they were
using restaurants as often as they would like.
The answer was a resounding no, with 43 percent
reporting they are not eating on the premises of
restaurants as frequently as they would like. This
indicator of pent-up demand was elevated across all
age groups, with at least four of 10 adults in each
category saying they aren’t dining out as often as they
would like. Women (46 percent) were more likely than
men (38 percent) to say they would like to dine out
more often.
4
Consumers’ Assessment of Their Own
Personal Finances
December 2010 vs. December 2013
December 2013
20%
38%
33%
8%
December 2010
18%
Poor
41%
Fair
Good
34%
7%
Excellent
Source: National Restaurant Association, National Household Surveys, 2010 and 2013
Consumers’ Description of Their Current
Personal Spending Behavior
Adults Who RateAdults Who Rate
Their PersonalTheir Personal
Finances as
Finances at
All AdultsExcellent or Good Fair or Poor
Confident in their financial
situation and have not
cut back on spending.
24%
39%
13%
Taking the wait and see
approach, and have cut back
somewhat on spending until
the economy improves.
42%
44%
41%
Very concerned about the
economy and have cut back
significantly on spending.
34%
17%
46%
Source: National Restaurant Association, National Household Survey, 2013
Consumers’ Outlook
for Their Household
Financial Situation
in 2014
Better Than
2013
Source: National Restaurant Association,
National Household Survey, 2013
About the
Same as 2013
54%
35%
11%
Worse Than
2013
Unfulfilled demand was even somewhat elevated
among individuals from higher-income households.
Twenty-seven percent of individuals in households
with annual incomes of $75,000 to $99,999 and 18
percent of those with annual incomes of $100,000 or
more said they are not eating on premises of restaurants as often as they would like. These households are
prime restaurant customers, accounting for roughly 57
percent of total restaurant spending in 2012.
Consumers had a similar attitude about their
off-premises occasions, with 42 percent saying they are
not purchasing takeout or delivery as frequently as
they would like. Older adults were more likely than
their younger counterparts to say they would like to be
using takeout and delivery options more often.
Among consumers who described their personal
financial situations as either fair or poor, roughly
one-half said they aren’t using restaurants as often as
they would like. In addition, six of 10 adults who have
cut back significantly on spending said they would like
to be using restaurants more frequently.
Even the industry’s regulars are not getting their fill
of restaurants. More than one of four frequent
restaurant customers — those who average more than
one occasion per week in a particular category — said
they aren’t eating on premises or using takeout or
delivery as often as they would like.
Putting these results in a historical context, this
measure of pent-up demand remains well above
pre-recession levels. On a consistent basis during the
stronger restaurant business environment of the
mid-2000s, typically only one-quarter of adults said
they were not patronizing restaurants as frequently as
they would like.
Overall, these survey results suggest that consumers’ appetite for restaurants remains largely unfulfilled,
and they will be primed to burn off their accumulated
pent-up demand for restaurants when they are more
confident in their personal financial situation.
Pent-up demand for
restaurants remains
above pre-recession
levels.
Consumers’ Pent-Up Demand
for Restaurants Remains Elevated
Percent of Adults Who Say
They Are Not Using
Restaurants as Often as
They Would Like
Not Eating on
the Premises at
Restaurants and
Fast Food Places
as Often as They
Would Like
Not Purchasing
Take-Out Foods or
Having It Delivered
as Often as They
Would Like
All Adults
43%
42%
Men
38%
40%
Women
46%
43%
18 to 34 Years Old
42%
39%
35 to 44 Years Old
43%
38%
45 to 54 Years Old
46%
42%
55 to 64 Years Old
40%
43%
65 Years or Older
43%
49%
Age
Household Income
Less than $35,000
58%
56%
$35,000 to $49,999
40%
36%
$50,000 to $74,999
41%
37%
$75,000 to $99,999
27%
23%
$100,000 or More
18%
17%
Region of the Country
Northeast
39%
36%
Midwest
40%
40%
South
46%
46%
West
42%
42%
Frequent Customers*
Fullservice Customers
26%
27%
Quickservice Customers
31%
28%
Off-Premises Dinner Customers
33%
27%
Personal Finance Assessment
Excellent or Good
28%
29%
Fair or Poor
52%
50%
Personal Spending Behavior
Have Not Cut Back
25%
23%
Have Cut Back Somewhat
39%
38%
Have Cut Back Significantly
58%
60%
*Frequent customers are defined as averaging more than one occasion per week in that particular
category.
5
Restaurant-Industry Sales
Footnotes:
1Data are given only
for establishments
with payroll.
Restaurant-industry food-and-drink sales: Projections for 2014
2013 Projected
2014 Projected
’13-’14 %
F&D Sales ($000)F&D Sales ($000)
Change
‘13-’14 %
Real Growth
Change
GROUP I — COMMERCIAL RESTAURANT SERVICES1
EATING PLACES
Tableservice restaurants2
$206,978,965
$212,360,419
2.6%
0.2%
187,073,590
195,379,658
4.4%
2.1%
8,608,378
8,823,588
2.5%
0.1%
29,237,025
30,698,823
5.0%
2.7%
Limited-service (quickservice) restaurants3
Cafeterias, grill-buffets and buffets4
Snack and nonalcoholic beverage bars
Social caterers
TOTAL EATING PLACES
8,260,001
8,673,002
5.0%
2.6%
$440,157,959
$455,935,490
3.6%
1.2%
19,401,396
19,964,037
2.9%
0.4%
3.6%
1.2%
Bars and taverns
TOTAL EATING-AND-DRINKING PLACES
$459,559,355
$475,899,527 5
MANAGED SERVICES6
$7,635,276
$7,975,046
4.5%
2.1%
Commercial and office buildings
Manufacturing and industrial plants
2,828,296
2,916,257
3.1%
0.7%
Hospitals and nursing homes
5,691,290
6,000,946
5.4%
2.9%
Colleges and universities
14,825,692
15,196,335
2.5%
-0.5%
Primary and secondary schools
6,348,520
6,589,764
3.8%
0.9%
In-transit restaurant services (airlines)
2,203,983
2,197,371
-0.3%
-2.7%
Recreation and sports centers
6,028,580
6,221,495
3.2%
0.8%
$45,561,637
$47,097,214
3.4%
0.7%
$32,637,798
$34,439,405
5.5%
3.1%
TOTAL MANAGED SERVICES
LODGING PLACES
Hotel restaurants
Other accommodation restaurants
395,470
405,792
2.6%
0.2%
$33,033,268
$34,845,197
5.5%
3.1%
Retail-host restaurants7
36,452,446
38,310,021
5.1%
2.7%
Recreation and sports8
14,175,794
14,528,096
2.5%
0.1%
688,288
717,861
4.3%
1.9%
12,437,893
12,862,757
3.4%
0.9%
$601,908,681
$624,260,673
3.7%
1.3%
$435,168
2.0%
-0.2%
6,920,073
7,136,596
3.1%
0.2%
7,573,881
7,718,429
1.9%
-1.1%
Transportation
2,256,605
2,317,277
2.7%
0.2%
Hospitals12
16,512,795
17,041,205
3.2%
0.6%
TOTAL LODGING PLACES
Mobile caterers
Vending and nonstore retailers9
TOTAL — GROUP I
GROUP II — NONCOMMERCIAL RESTAURANT SERVICES10
Employee restaurant services11
$426,579
Public and parochial elementary, secondary schools
Nursing homes, homes for the aged, blind, orphans
and the mentally and physically disabled13
8,272,376
2 Waiter/waitress
service is provided,
and the order is
taken while the
patron is seated.
Patrons pay after
they eat.
3 Patrons generally
order at a cash
register or select
items from a food
bar and pay before
they eat.
4 Formerly commercial
cafeterias.
5 Food-and-drink sales
for nonpayroll
establishments are
projected to total
$13,608,941,000.
6 Also referred to as
onsite foodservice
and food contractors.
7Includes health-andpersonal-carestore restaurants,
general-merchandisestore restaurants,
variety-store
restaurants,
food-store restaurants
and grocery-store
restaurants (including
a portion of delis and
all salad bars),
gasoline/servicestation restaurants
and miscellaneous
retailers.
8Includes movies,
bowling lanes,
recreation and sport
centers.
9Includes sales of hot
food, sandwiches,
pastries, coffee and
other hot beverages.
10Business, educational, governmental
or institutional
organizations that
operate their own
restaurant services.
11Includes industrial
and commercial
organizations,
seagoing and inlandwaterway vessels.
12Includes voluntary
and proprietary
hospitals; long-term
general, TB, nervous
and mental hospitals;
and sales or
commercial
equivalent to employees in state and local
short-term hospitals
and federal hospitals.
8,495,731
2.7%
0.5%
Clubs, sporting and recreational camps
9,884,153
10,259,813
3.8%
1.4%
Community centers
3,077,899
3,164,081
2.8%
0.5%
TOTAL — GROUP II
$54,924,361
$56,568,300
3.0%
0.4%
$656,833,042
$680,828,973
3.7%
1.2%
$1,686,296
$1,720,022
2.0%
-0.4%
789,553
811,661
2.8%
0.4%
$2,475,849
$2,531,683
2.3%
-0.1%
13 Sales (commercial
equivalent)
calculated for
nursing homes and
homes for the aged
only. All others in this
grouping make no
charge for food
served either in cash
or in kind.
$659,308,891
$683,360,656
3.6%
1.2%
14Continental United
States only.
TOTAL — GROUPS I AND II
GROUP III — MILITARY RESTAURANT SERVICES14
Officers’ and NCO clubs (Open mess)
Military exchanges
TOTAL — GROUP III
GRAND TOTAL
6
Restaurant Industry Sales
(In Billions of Current Dollars)
11.9
million
14.8
13.5
million
2014*
million
$683.4
$586.7
2010
$379.0
2000
2004
2014*
2024 *
$239.3
1990
1980 $119.6
Restaurant Industry Employment
1970
$42.8
*projected
*projected
Adding It All Up: $683.4 billion
Restaurant Industry’s
Share of the Food Dollar
Projected restaurant industry sales in 2014
Commercial Restaurant Services
1955
$624.3 billion
Eating Places*: $455.9 billion
Bars and Taverns: $20.0 billion
25%
Managed Services: $47.1 billion
Lodging Places: $34.8 billion
Present
Retail, Vending, Recreation, Mobile: $66.4 billion
Noncommercial Restaurant Services
*Eating places include tableservice restaurants
and quickservice restaurants, cafeterias and
buffets, social caterers, and snack and
nonalcoholic beverage bars.
$56.6 billion
47%
Military Restaurant Services
$2.5 billion
Restaurant-Industry Sales over Five Years 2010-2014
2010
2011
‘10-’11
2012
‘11-’12
2013
‘12-’13
2014*
‘13-’14
Sales ($000) Sales ($000) Change Sales ($000) Change Sales ($000)Change Sales ($000) Change
COMMERCIAL RESTAURANT SERVICES
$535,049,233
Eating Places
393,086,667
Tableservice restaurants
189,459,020
Limited-service restaurants
163,041,239
Cafeterias, grill-buffets and buffets
8,009,430
Snack and nonalcoholic beverage bars 25,495,295
Social caterers
7,081,683
Bars and taverns
17,755,493
TOTAL EATING-AND-DRINKING PLACES $410,842,160
NONCOMMERCIAL RESTAURANT SERVICES $49,460,016
MILITARY RESTAURANT SERVICES
$2,240,169
TOTAL INDUSTRY SALES
$586,749,418
$557,571,805
408,839,139
196,165,870
170,215,054
8,233,695
26,703,772
7,520,748
18,323,669
$427,162,808
$51,632,579
$2,342,502
$611,546,886
4.2%
4.0%
3.5%
4.4%
2.8%
4.7%
6.2%
3.2%
4.0%
4.4%
4.6%
4.2%
$582,812,277
426,780,905
202,325,479
180,155,614
8,423,070
27,972,435
7,904,307
18,946,674
$445,727,579
$53,387,827
$2,420,407
$638,620,511
4.5%
4.4%
3.1%
5.8%
2.3%
4.8%
5.1%
3.4%
4.3%
3.4%
3.3%
4.4%
$601,908,681
440,157,959
206,978,965
187,073,590
8,608,378
29,237,025
8,260,001
19,401,396
$459,559,355
$54,924,361
$2,475,849
$659,308,891
3.3%
3.1%
2.3%
3.8%
2.2%
4.5%
4.5%
2.4%
3.1%
2.9%
2.3%
3.2%
$624,260,673
455,935,490
212,360,419
195,379,658
8,823,588
30,698,823
8,673,002
19,964,037
$475,899,527
$56,568,300
$2,531,683
$683,360,656
3.7%
3.6%
2.6%
4.4%
2.5%
5.0%
5.0%
2.9%
3.6%
3.0%
2.3%
3.6%
*Projected
7
State
Snapshots
2014 State and
Regional Outlook
R
estaurant sales on the state and
local levels are often closely tied
to economic and demographic
trends. Just as the strength of the
economic recovery varied significantly
by state, so too has the general business
environment for restaurants.
While trends generally were moving
in a positive direction by the end of
2013, it is clear that not all recoveries
are created equal. Although every state
has added jobs since national employment bottomed out in February 2010,
only 17 states and the District of
Columbia have more jobs than they did
before the recession started (both as of
November 2013).
Moreover, the range of state-level
unemployment rates remains large
— from a low of 2.6 percent in North
Dakota to a high of 9 percent in
Nevada and Rhode Island in November
2013. Jobless rates should continue to
trend downward in 2014, as the NRA
expects every state to post employment
gains of at least 1 percent.
Job growth will continue to be a key
driver of restaurant sales growth in
2014 because it not only provides the
disposable income necessary to
support spending, but also generates
the need for convenience that the
restaurant industry provides.
In 2014, the West South Central
region is expected to lead the way with
restaurant sales growth of 4.3 percent,
8
slightly above a projected 4.1 percent
gain in the Mountain region. Sales
gains in these regions are driven largely
by employment, income and population growth that is projected to be well
above the national average in 2014.
The South Atlantic (3.8 percent)
and Pacific (3.7 percent) regions are
also expected to register sales growth
above the projected 2014 national
growth rate of 3.6 percent.
On the state level, Arizona is
expected to set the pace with restaurant
sales growth of 4.9 percent in 2014,
followed closely by North Dakota (4.8
percent) and Texas (4.7 percent).
Florida (4.5 percent) and Colorado (4.1
percent) represent the only other states
with projected sales growth above 4
percent in 2014.
The top five states in terms of
restaurant sales gains will also be the
leaders in 2014 overall job growth,
according to NRA projections. In
addition, these states are expected to
post population growth above the
national average in 2014.
California will continue to lead the
nation with total restaurant sales
volume of nearly $70 billion in 2014,
with Texas following well behind at
$42.6 billion. The restaurant industries
in Florida and New York are expected
to register sales of nearly $35 billion in
2014.
2014 Restaurant
Sales Growth
1Arizona
4.9%
2North Dakota
4.8%
3Texas
4.7%
4
4.5%
Florida
5Colorado
4.1%
6California
3.9%
7Oregon
3.8%
8Utah
3.8%
9Nevada
3.7%
10 Georgia
3.7%
11North Carolina
3.7%
12 Idaho
3.7%
2014 Restaurant
Sales Volume ($000)
1California
$69,711,721
2Texas
3
Florida
$42,557,184
$34,695,955
4New York
$34,635,161
5
Illinois
$22,362,318
6
Pennsylvania
$18,279,004
7Ohio
8
Georgia
$17,832,986
$16,511,007
9North Carolina
$15,942,303
10New Jersey
$14,585,470
11
$14,334,835
Virginia
12 Michigan
$13,471,777
2014 Projected Growth in
Total Employment
1North Dakota
3.4%
2Arizona
2.8%
3Texas
2.7%
4Colorado
2.6%
5
2.4%
Florida
6Utah
2.2%
7
Georgia
2.2%
8
South Carolina
2.1%
9North Carolina
2.1%
10 Idaho
2.0%
11Oregon
1.9%
12 Minnesota
1.9%
State Economic Indicators
Projected Percent Change, 2013-2014
Total
Real DisposableTotal
Employment Personal Income Population
RESTAURANT SALES ($000)
2013
2014
% Change
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
New England
1.4%
1.0%
1.3%
1.2%
1.1%
1.1%
1.3%
2.7%
2.3%
2.8%
2.7%
2.6%
2.0%
2.7%
0.1%
0.2%
0.4%
0.5%
0.2%
0.0%
0.3%
$6,045,395
1,994,195
13,102,149
2,337,267
1,935,530
855,378
$26,269,914
$6,220,712
2,044,049
13,450,666
2,405,047
1,980,821
874,710
$26,976,005
2.9%
2.5%
2.7%
2.9%
2.3%
2.3%
2.7%
New Jersey
New York
Pennsylvania
Middle Atlantic
1.5%
1.2%
1.2%
1.3%
3.0%
3.1%
3.0%
3.1%
0.3%
0.2%
0.1%
0.2%
$14,140,058
33,447,765
17,770,760
$65,358,583
$14,585,470
34,635,161
18,279,004
$67,499,635
3.2%
3.6%
2.9%
3.3%
Delaware
District of Columbia
Florida
Georgia
Maryland
North Carolina
South Carolina
Virginia
West Virginia
South Atlantic
1.8%
1.1%
2.4%
2.2%
1.8%
2.1%
2.1%
1.8%
1.5%
2.1%
2.8%
2.4%
3.8%
3.5%
2.9%
3.5%
3.4%
3.0%
2.7%
3.4%
1.0%
1.6%
1.8%
1.7%
0.4%
1.7%
1.1%
0.9%
0.1%
1.4%
$1,631,343
2,673,262
33,216,174
15,928,041
10,247,746
15,379,417
7,481,435
13,863,477
2,149,836
$102,570,731
$1,689,582
2,753,460
34,695,955
16,511,007
10,581,823
15,942,303
7,747,774
14,334,835
2,207,881
$106,464,620
3.6%
3.0%
4.5%
3.7%
3.3%
3.7%
3.6%
3.4%
2.7%
3.8%
Illinois
Indiana
Michigan
Ohio
Wisconsin
East North Central
1.2%
1.6%
1.6%
1.4%
1.4%
1.4%
2.5%
2.7%
2.8%
2.5%
2.5%
2.6%
0.3%
0.5%
0.1%
0.1%
0.3%
0.2%
$21,635,370
9,196,437
13,071,780
17,354,015
7,309,617
$68,567,219
$22,362,318
9,468,652
13,471,777
17,832,986
7,525,982
$70,661,715
3.4%
3.0%
3.1%
2.8%
3.0%
3.1%
Alabama
Kentucky
Mississippi
Tennessee
East South Central
1.6%
1.6%
1.7%
1.4%
1.5%
2.8%
2.8%
2.7%
2.7%
2.7%
0.8%
0.5%
0.4%
0.9%
0.7%
$6,380,060
6,228,475
3,408,791
9,822,481
$25,839,807
$6,607,190
6,437,752
3,507,646
10,132,871
$26,685,459
3.6%
3.4%
2.9%
3.2%
3.3%
Iowa
Kansas
Minnesota
Missouri
Nebraska
North Dakota
South Dakota
West North Central
1.4%
1.4%
1.9%
1.3%
1.5%
3.4%
1.8%
1.6%
2.6%
2.7%
2.9%
2.6%
2.8%
6.7%
3.1%
2.9%
0.2%
0.7%
0.6%
0.5%
0.4%
1.5%
0.9%
0.5%
$3,453,972
3,821,910
8,224,744
9,108,857
2,439,886
846,038
1,065,506
$28,960,913
$3,542,394
3,938,861
8,468,196
9,369,370
2,514,547
886,309
1,101,734
$29,821,411
2.6%
3.1%
3.0%
2.9%
3.1%
4.8%
3.4%
3.0%
Arkansas
Louisiana
Oklahoma
Texas
West South Central
1.5%
1.7%
1.7%
2.7%
2.4%
2.7%
2.8%
3.0%
3.5%
3.3%
0.5%
0.4%
0.5%
1.7%
1.3%
$3,477,815
6,784,684
5,115,866
40,662,320
$56,040,685
$3,587,714
7,028,933
5,287,759
42,557,184
$58,461,590
3.2%
3.6%
3.4%
4.7%
4.3%
Arizona
Colorado
Idaho
Montana
Nevada
New Mexico
Utah
Wyoming
Mountain
2.8%
2.6%
2.0%
1.8%
1.8%
1.3%
2.2%
1.7%
2.3%
4.6%
3.4%
3.2%
3.9%
3.2%
2.4%
3.5%
3.5%
3.6%
2.2%
1.2%
1.1%
1.0%
2.1%
0.7%
1.6%
1.0%
1.6%
$10,465,758
9,432,484
1,929,165
1,459,361
5,743,825
3,118,463
3,492,910
846,101
$36,488,067
$10,974,393
9,815,443
1,999,772
1,509,855
5,954,049
3,229,480
3,624,243
874,530
$37,981,765
4.9%
4.1%
3.7%
3.5%
3.7%
3.6%
3.8%
3.4%
4.1%
Alaska
California
Hawaii
Oregon
Washington
Pacific
1.3%
1.8%
1.6%
1.9%
1.8%
1.8%
2.6%
3.0%
2.7%
3.2%
3.1%
3.0%
1.0%
0.9%
0.9%
1.2%
1.0%
1.0%
$1,307,494
67,127,319
3,703,128
6,467,862
10,848,158
$89,453,961
$1,351,948
69,711,721
3,831,256
6,711,054
11,201,327
$92,807,306
3.4%
3.9%
3.5%
3.8%
3.3%
3.7%
Note: Sales figures are in current dollars, and are not adjusted for menu price inflation.
9
2014 Economic Outlook
A
Judging the Present
by the Past
lthough the distance from the official end of the Great Recession entered its fifth
year during 2013, the economy continued to face many of the same starts and stops
that have defined the recovery to this point. However, the economy still added over
2 million jobs for the second consecutive year, and growth became much more broad-based
across sectors.
Despite the improvement in the job market, the underlying strength of the economy has
yet to trickle down into the mindset of consumers. NRA research conducted in December
2013 shows that only about one of 10 adults gave the national economy a rating of either
“excellent” (1 percent) or “good” (12 percent). Thirty-seven percent of consumers described
the economy as “fair,” while one-half gave it a “poor” rating.
This sentiment was essentially unchanged from consumers’ economic assessment a year
earlier, despite the addition of more than 2 million jobs and a dip in the unemployment rate
of more than a full percentage point. It’s clear that from the perspective of many consumers,
the economy continued to trend sideways in 2013.
Consumers Remain Unimpressed by the Economy
Consumers’ assessment of the national economy: 2010 – 2013
2013
50%
37%
12%
1%
2012
53%
36%
10%
1%
2011
65%
27%
7%
2010
58%
Poor
Fair
Good
34%
Excellent
Source: National Restaurant Association, National Household Surveys, 2010–2013
10
8%
1%
To be sure, the current recovery continues to lag
well behind, relative to the previous four
recessions. Seventeen quarters after the official
trough of the recession, real gross domestic
product (GDP) grew only 10 percent. Contrast
that with 14 percent gains at the same point
during the previous two recoveries and more than
21 percent growth at similar stages after the
recessions in the 1970s and 1980s, and it’s clear
that the economy is not yet operating at full
strength.
Similarly, post-recession job growth has
remained generally lackluster, with total U.S.
employment rising 3.9 percent since the official
end of the recession. This growth lagged well
behind the previous four recoveries with the
exception of the early-2000s recession, when
employment was up just 3.4 percent after 17
quarters of growth.
However, a critical difference between the last
two recessions was the depth of the downturns.
During the recession of the early-2000s, the
economy lost 2.7 million jobs, or 2.0 percent of its
employment base. By this point in the recovery,
employment stood 3.3 million jobs above the
pre-recession peak.
In contrast, the recent recession was significantly more severe, with the economy losing
nearly 9 million jobs, or 6.3 percent of its total
employment base. By the end of 2013, employment still remained nearly 1 million jobs below
the pre-recession peak. So despite the somewhat
stronger job growth than the recovery period
after the early-2000s recession, the economy is
still in worse shape overall.
Economy Continues to Lag Behind Past Recoveries
Percent change: 17 quarters after official recession troughs
21.7%
21.3%
16.7%
Potential to Break Free in
2014
Given the depth of the hole that the Great
Recession dug, it’s not surprising that the
economy has taken so long to climb out.
Challenges certainly remain – particularly the
potential for more budget battles in Washington, which serve to undermine the confidence
of both consumers and businesses. But overall,
the positive factors outweigh the risks in 2014,
and the economy will likely find itself traveling
on the smoothest road that it has since before
the recession.
Job growth always has been a key driver of
restaurant sales, and this will be the case in 2014
more than any time in recent memory. Consumers want to increase their frequency in restaurants, as illustrated by their elevated levels of
pent-up demand. The key factor holding them
back is a lack of confidence in their financial
situations, and an increase in the availability and
security of jobs will help allay these concerns.
Fortunately, 2014 is projected to be the
economy’s best job-creating year since the end
Job GROWTH
14.5%
14.2%
10.7%
10.3%
7.7%
3.9%
3.4%
1975: Q1
1982: Q2
1991: Q1
2001: Q4
OFFICIAL RECESSION TROUGHS
Real Gross Domestic Product (GDP)
2009: Q2
Total U.S. Employment
Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, National Restaurant Association
of the recession. The NRA expects total U.S.
employment to rise 1.8 percent in 2014, up
from a 1.7 percent gain in 2013 and the
strongest increase since 2006.
Moreover, the economy is projected to post
monthly job gains averaging more than 200,000
over an entire year for the first time since 2005.
Seeing a more consistent stream of positive numbers reported on the evening news will help
bolster consumers’ confidence in the economy.
Income growth is also projected to
accelerate along with the employment gains in
2014. The NRA expects real disposable
Income GROWTH
personal income to increase at a 2.8 percent
rate in 2014, up from a modest 0.8 percent gain
in 2013 and the strongest increase since 2006.
As an industry in which a large proportion of
growth is driven by cash on hand, steady gains
in disposable personal income are essential to
boosting restaurant patronage.
Overall, the economy will likely enjoy its
best year of growth in nearly a decade. The
NRA expects real Gross Domestic Product
(GDP) to grow at a 3.0 percent rate in 2014, up
from a 1.9 percent increase in 2013 and the
strongest gain since 2005.
Economic GROWTH
Economy Expected to Add Jobs Personal Income Gains
at Strongest Rate Since 2006
Will Accelerate
Economy Projected to Grow at
Its Strongest Pace Since 2005
Total U.S. employment growth
Real Gross Domestic Product growth
Real disposable personal income growth
4.0%
1.7% 1.8%
1.2%
1.1%
-0.6%
1.7%
1.7% 1.8%
-0.7%
1.5%
2.1%
2.4%
1.5%
1.1%
2.8%
2.0%
3.4%
2.7%
3.0%
2.8%
2.5%
1.8%
1.8%
1.9%
0.8%
-0.3%
-0.5%
-2.8%
-4.3%
2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014*
2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014*
2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014*
Sources: Bureau of Labor Statistics, National Restaurant
Association *Projected
Sources: Bureau of Economic Analysis, National
Restaurant Association
*Projected
Sources: Bureau of Economic Analysis, National
Restaurant Association
*Projected
11
Travel and Tourism Will Make
a Positive Contribution in 2014
Food Prices Expected
to be Mixed in 2014
Elevated food prices continued to pressure
restaurant operators’ bottom lines in 2013.
Average wholesale food prices rose 2.3 percent
in 2013, which marked the fourth consecutive
annual gain for a total of nearly 20 percent.
Looking ahead to 2014, restaurant operators
can expect to get pricing relief on some major
commodities. The U.S. Department of
Agriculture (USDA) expects declines in
primary market prices for pork and broilers in
2014, after both commodities posted sharp
gains in 2013.
In contrast, USDA expects primary market
prices for beef to post moderate gains in 2014,
which will build on the already elevated price
levels.
USDA projects mixed trends in dairy prices
in 2014, while egg prices are expected to fall
sharply.
International tourism to the United States hit a record high in 2013, according to the Office
of Travel and Tourism Industries (OTTI) within the U.S. Department of Commerce. An
estimated 69 million international visitors came to the United States in 2013, up from 66.7
million in 2012. Approximately 37.5 million of these visitors came from Canada and Mexico,
while an estimated 31.5 million international travelers came from overseas.
Growth in international tourism is expected to continue in the years ahead. OTTI
expects 71.8 million international visitors to come to the U.S. in 2014, which would
represent another record high. Looking further down the road, OTTI expects 4 percent
annual growth in international visitors during the next several years, which would result
in more than 83 million international visitors to the U.S. by 2018.
In addition to passenger fares, international travelers to the U.S. are expected to spend
well over $100 billion on tourism-related goods and services in 2014, including spending
in restaurants.
With visitors representing a growing source of potential customers, many restaurant
operators are focusing more of their marketing efforts toward travelers and tourists. A
majority of both tableservice and limited-service operators — including 96 percent of finedining operators — are planning to do some marketing toward travelers and tourists in 2014.
Fine dining operators are the most likely to say they plan to ramp up efforts in this area
in 2014. Thirty-nine percent of fine-dining operators say they plan to devote more
resources to marketing toward travelers and tourists in 2014, while only 6 percent plan to
cut back in this area.
Another Record Influx of International Visitors
Expected in 2014
International arrivals to the United States in millions
2014 Commodity Price
Outlook
Projected high/low growth rates for
primary market prices
2012
2013
2014
Beef
7%
2%
2% to 9%
66.7
56.0
46.9
46.1
43.6
49.2
58.0
60.0
51.0
41.2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Pork
-8%
6%
-2% to -8%
Broilers
10%
15%
-1% to -8%
Turkeys
4%
-6%
-2% to 5%
Eggs
2%
5%
-7% to -13%
Milk
-8%
8%
-1% to 3%
-6%
3%
0% to -4%
More resources in 2014
-18%
-3%
-3% to 4%
Fewer resources in 2014
Butter
Source: U.S. Department of Agriculture, December 2013
projections
2011
2012 2013* 2014*
*Projected
Restaurant Operators’ Plans for Marketing Toward
Travelers and Tourists in 2014
FamilyCasual
Fine
Quick- Fast
DiningDiningDining serviceCasual
25%
32%
39%
10%
11%
2%
4%
6%
7%
7%
About the same amount of
resources in 2014
54%
44%
51%
55%
44%
Don’t plan to devote resources to
marketing toward travelers and
tourists in 2014
18%
20%
4%
27%
38%
Source: National Restaurant Association, Restaurant Trends Survey, 2013
12
71.8
55.1
Source: U.S. Department of Commerce, Office of Travel and Tourism Industries
Cheddar
69.0
62.7
Gas and Diesel
Prices Expected
to Moderate
m
Energy prices are important indicators for
the restaurant industry because they impact
both consumer demand and the operational
side of the business. In 2014, gas and diesel
prices are projected to come down somewhat
from recent highs, according to the U.S.
Energy Information Administration (EIA).
On the consumer side, EIA expects gas
prices to average $3.46 in 2014. The forecast is
down slightly from an average of $3.51 in 2013
and below the record high of $3.63 in 2012.
However, prices will still remain well above the
recent averages of $2.35 in 2009 and $2.78 in
2010. The elevated levels of gas prices will
continue to put pressure on households,
particularly if income growth remains sluggish.
On the operational side, EIA is projecting
increases in both electricity and natural gas
prices for the commercial sector in 2014.
Electricity prices are projected to average
10.40 cents per kilowatt hour in 2014, a 1.3
percent increase from their 2013 level.
Natural gas prices are expected to average
$9.38 per thousand cubic feet in 2014, up
12.5 percent from 2013.
Diesel prices also impact the cost side of
the business, as they generally influence the
cost of supplies. EIA expects on-highway
diesel fuel to average $3.81 a gallon in 2014,
down from the previous two years when
prices averaged above $3.90 a gallon.
Gas and Diesel Prices Are
Expected to Decline in 2014
$3.97
$3.92
$3.81
2013
$3.63
H
ousehold income remained stagnant in 2012, according to the latest figures from the U.S.
Census Bureau. Real median household income was $51,017 in 2012, essentially
unchanged from 2011 and down 8.3 percent from its recent cyclical high in 2007. In addition,
real median household income stood at its lowest level since 1995, a trend that is concerning
for the economy.
But looking inside the numbers, there are some positive signs for the restaurant industry, as
the number of higher-income households rose for the first time in five years. The number of
households with annual income above $75,000 numbered 41.3 million in 2012 — up 3.0
percent from a total of 40.1 million in 2011. This marked the first gain since 2007 and the
largest increase in higher-income households since 1999.
While the growth is a move in the right direction, the number of higher-income households
still remained 1.1 million below the record high reached in 2007, when there were 42.4 million
households with income above $75,000.
The potential implications for the restaurant industry are significant, as higher-income
households represent the majority of spending in the industry. According to data from the
Bureau of Labor Statistics, households with incomes of $100,000 or higher are responsible for
38 percent of the total spending on food away from home, while households with incomes
between $70,000 and $99,999 account for 19 percent of industry spending.
Drilling down to the state level, only a handful of jurisdictions enjoyed gains in household
income during the last five years. Only the District of Columbia and five states — North
Dakota, Wyoming, Vermont, Texas and Oklahoma — saw their median household incomes
rise between 2007 and 2012. On the opposite end of the spectrum, 2012 median household
incomes in Nevada and Hawaii were more than 20 percent below their 2007 levels.
Number of Higher-Income Households Declined Between
2007 and 2012
Number of U.S. households by income bracket (in millions) adjusted for
inflation in 2012 dollars
1990
1990-2007
2007
2007-2012
2012
Less Than $25,000
22.6
15%
26.0
16%
30.2
$25,000 to $49,999
24.0
17%
27.9
7%
29.8
$50,000 to $74,999
19.0
8%
20.4
5%
21.4
$75,000 to $99,999
12.3
19%
14.6
-2%
14.3
$100,000 or More
16.6
67%
27.8
-3%
26.9
Source: National Restaurant Association analysis of U.S. Census Bureau data
Historical and projected prices for
regular gasoline and diesel fuel
2012
Household Income Remains Flat
2014
$3.51
Higher-Income
Households are
Prime Restaurant
Customers
Share of total restaurant
spending by household income
levels
$3.46
Regular Gasoline
Diesel Fuel
Source: U.S. Energy Information Administration,
January 2014 projections
analysis of Bureau of Labor Statistics data
$100K
or
More
$70K
to
$99K
$50K
to
$69K
$30K
to
$49K
Less
Than
$30K
38%
19%
14%
14%
15%
13
APPENDIX A
Major Markets: Projected Sales, 2014
The charts on pages 14 and 15 provide more detail on the National Restaurant Association’s projections for sales in the
markets outside the eating-and-drinking places category in 2014.
EDUCATIONAL SALES
Food-and-drink sales by foodservice companies that manage restaurant services in colleges, universities, primary and secondary schools, as well as
food-and-drink sales by schools that operate their own restaurant services.
$36.6
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
F&D Sales ($000)F&D Sales ($000) Change Growth Change
Managed services
Noncommercial
Subtotal
Managed services
Noncommercial
Subtotal
TOTAL EDUCATIONAL
$14,825,692
7,573,881
22,399,573
$15,196,335
7,718,429
22,914,764
2.5%
1.9%
2.3%
-0.5%
-1.1%
-0.7%
6,348,520
6,920,073
13,268,593
6,589,764
7,136,596
13,726,360
3.8%
3.1%
3.5%
0.9%
0.2%
0.6%
$35,668,166
$36,641,124
2.7%
-0.2%
EMPLOYEE SALES
Food-and-drink sales by for-profit companies that manage restaurant services for employees at manufacturing and industrial plants and in commercial
office buildings, as well as food-and-drink sales by plants and companies that run their own noncommercial employee restaurant services.
$11.3
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Managed services
$7,635,276
2,828,296
Noncommercial employee restaurant services* 426,579
$7,975,046
2,916,257
435,168
4.5%
3.1%
2.0%
2.1%
0.7%
-0.2%
TOTAL EMPLOYEE
$11,326,471
4.0%
1.6%
$10,890,151
*Includes sales for industrial plants and office buildings, seagoing ships, and inland waterway vessels.
HEALTH-CARE SALES
Food-and-drink sales by foodservice companies that manage restaurant services in hospitals and nursing homes, as well as food-and-drink sales by
hospitals and nursing homes that operate their own restaurant services.
$31.5
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Managed services in hospitals and nursing homes $5,691,290
Hospitals*
16,512,795
Nursing homes**
8,272,376
$6,000,946
17,041,205
8,495,731
5.4%
3.2%
2.7%
2.9%
0.6%
0.5%
TOTAL HEALTH CARE
$31,537,882
3.5%
1.0%
$30,476,461
*Includes voluntary and proprietary hospitals; long-term general, TB, mental hospitals; and sales or commercial equivalent to employees in state
and local short-term hospitals and federal hospitals.
**Includes homes for the aged, blind, orphans, mentally and physically disabled; sales (commercial equivalent) calculated for nursing homes and
homes for the aged only. All others in this group make no charge — either in cash or in kind for food served.
Lodging-Place SALES
Food-and-drink sales at hotel restaurants and other accommodation restaurants.
$34.8
Billion
2014 projected
food-and-drink
sales
14
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Hotel restaurants
$32,637,798
395,470
$34,439,405
405,792
5.5%
2.6%
3.1%
0.2%
$33,033,268
$34,845,197
5.5%
3.1%
APPENDIX A
Major Markets Continued
MILITARY SALES
Food-and-drink sales at military clubs and exchanges.
$2.5
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Military exchanges
TOTAL MILITARY*
$1,686,296
789,553
$1,720,022
811,661
2.0%
2.8%
-0.4%
0.4%
$2,475,849
$2,531,683
2.3%
-0.1%
*Continental United States only.
RECREATIONAL SALES
Food-and-drink sales at recreation and sports centers, such as movie theaters, sports arenas and bowling lanes.
$31.0
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Managed services
Noncontractors*
Subtotal
Clubs, sporting and recreational camps**
TOTAL RECREATIONAL
$6,028,580
14,175,794
20,204,374
9,884,153
$6,221,495
14,528,096
20,749,591
10,259,813
3.2%
2.5%
2.7%
3.8%
0.8%
0.1%
0.3%
1.4%
$30,088,527
$31,009,404
3.1%
0.6%
*Includes sales at movies, bowling lanes, and recreation and sports centers.
**A portion of food-and-beverage sales in clubs is business-related.
Transportation SALES
Food-and-drink sales on airlines, passenger/cargo liners and railroads.
$4.5
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Managed services, in-transit commercial
airlines
Noncommercial transportation
TOTAL TRANSPORTATION
$2,203,983
2,256,605
$2,197,371
2,317,277
-0.3%
2.7%
-2.7%
0.2%
$4,460,588
$4,514,648
1.2%
-1.2%
Other SALES
$55.1
Billion
2014 projected
food-and-drink
sales
2013 Projected
2014 Projected ’13-’14 %
’13-’14 Real
Retail hosts*
Mobile caterers
Vending and non-store retailers**
Community centers
$36,452,446
688,288
12,437,893
3,077,899
$38,310,021
717,861
12,862,757
3,164,081
5.1%
4.3%
3.4%
2.8%
2.7%
1.9%
0.9%
0.5%
*Includes drug- and proprietary-store, general-merchandise-store, variety-store, food-store and grocery-store restaurants (including a portion of
delis and all salad bars); gasoline/service-station restaurants; and miscellaneous retailers.
**Includes sales of hot food, sandwiches, pastries, coffee and other hot beverages.
15
APPENDIX B
$241.9
BILLION
Projected restaurant
industry 2014 food-anddrink purchases
Purchasing: 2014 Projections
Restaurant-industry food-and-drink purchases: 20141
Projected Food-and-Drink Purchases ($000)
GROUP I — COMMERCIAL RESTAURANT SERVICES2
EATING PLACES
Fullservice restaurants
Limited-service (quickservice) restaurants
Cafeterias, grill-buffets and buffets
Snack and nonalcoholic beverage bars
Social caterers
TOTAL EATING PLACES
Bars and taverns3
TOTAL EATING-AND-DRINKING PLACES
MANAGED SERVICES
Hospitals and nursing homes
In-transit restaurant services (airlines)3
TOTAL MANAGED SERVICES
LODGING PLACES
Hotel restaurants
Retail-host restaurants
Recreation and sports
Mobile caterers
Vending and nonstore retailers
TOTAL — GROUP I
GROUP II — NONCOMMERCIAL RESTAURANT SERVICES
Employee restaurant services
Public and parochial elementary, secondary schools
Transportation
Hospitals
Nursing homes, homes for the aged, blind, orphans and
the mentally and physically disabled
Clubs, sporting and recreational camps
Community centers
Penal institutions
Convents and seminaries
TOTAL — GROUP II
$65,731,555
59,177,042
3,130,272
9,148,108
2,266,907
$139,453,884
6,677,616
$146,131,500
$3,182,043
1,210,247
2,166,342
5,029,987
2,405,264
983,913
1,738,488
$16,716,284
$10,003,146
138,433
$10,141,579
11,497,552
4,089,944
210,240
3,640,160
$192,427,259
$248,649
6,158,882
5,029,987
1,292,233
7,276,677
5,292,841
3,955,028
2,730,602
4,169,437
58,164
$36,212,500
TOTAL — GROUPS I AND II
$228,639,759
Food furnished foodservice employees (FSE) in Groups I and II
9,754,424
TOTAL — GROUPS I, II AND FSE
$238,394,183
GROUP III — MILITARY RESTAURANT SERVICES
Defense Personnel
Military exchanges
$2,708,825
598,568
286,516
TOTAL — GROUP III
$3,593,909
GRAND TOTAL
$241,988,092
1 Purchases refers to expenditures by foodservice establishments for their food-and-drink supplies. 2 Data are given
only for establishments with payroll. 3 Food purchases only.
16
Restaurant Job Growth Will
Continue, Despite Labor
Challenges on the Horizon
“2013 marked
the first
time in
nearly two
decades that
the restaurant
industry
posted backto-back job
gains above
3 percent.”
T
he restaurant workforce continued to grow at a robust rate in 2013, keeping the
industry among the economy’s leaders in job creation. Eating-and-drinking places, the
primary component of the restaurant industry accounting for three-fourths of the total
restaurant-and-foodservice workforce, added jobs at a strong 3.7 percent rate in 2013. The
solid 2013 performance came on the heels of a 3.5 percent increase in 2012, and marked the
first time in nearly two decades that the industry posted back-to-back gains above 3 percent.
In comparison, total U.S. employment grew at a 1.7 percent rate in 2013, or less than half of
the gain in eating-and-drinking place jobs. In addition, 2013 represented the 14th consecutive
year in which eating-and-drinking place job growth outpaced the overall economy. During this
14-year period, the number of eating-and-drinking place jobs jumped 29 percent, while total
U.S. employment only rose 5 percent.
Within the restaurant industry, job growth was broad-based in 2013. The snack-andnonalcoholic-beverage bars segment added jobs at an impressive 5.8 percent rate in 2013, followed
by a strong 4.5 percent increase in jobs the quickservice segment. The tableservice segment also
posted growth above the overall economy, with employment rising 3.4 percent in 2013.
Looking forward, 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 projected 2014 gain will represent the fourth consecutive year in which the
industry posted job growth in excess of 2.5 percent. In comparison, the overall economy hasn’t
registered job growth above 2.5 percent since 1998.
Restaurant Job Growth Projected to Outpace Overall
Economy for 15th Straight Year
Annual job growth: Eating-and-drinking places vs. total U.S. employment
1.2%
-0.7%
3.7%
3.5%
2.7%
1.7%
1.8%
1.7%
2.8%
-0.2%
-2.1%
-4.3%
2009
2010
Total U.S. Employment
2011
2012
2013
2014*
Eating-and-Drinking Place Employment
Sources: Bureau of Labor Statistics, National Restaurant Association projections
*Projected
17
Arizona and Texas to
Lead Job Growth
Future Growth
Remains Positive
Over the longer term, the restaurant industry is
expected to post steady employment gains well into
the future. The overall restaurant-and-foodservice
industry is projected to provide a record 13.5
million jobs in 2014. The total industry workforce is
defined by the NRA as employment in all eatingand-drinking-place occupations plus employment in
foodservice positions that are not located at eating
and drinking places.
Looking ahead over the next decade, the NRA
expects the restaurant-and-foodservice industry to
provide 14.8 million jobs by 2024, an increase of 1.3
million positions during the 10-year period.
On an occupational level, job growth is expected
to be broad-based over the next decade. Industry
jobs that combine food preparation and service are
projected to grow nearly 13 percent between 2014
and 2024, an increase of 402,000 positions. The
restaurant industry is also projected to add 238,000
server positions in the next 10 years, an increase of
nearly 10 percent.
The number of restaurant cook positions is
projected to increase 12 percent (132,000 jobs) in
the next decade, while chef and head cook jobs are
expected to rise 11 percent.
Supervisory and manager positions are also
expected to post gains during the next decade. The
number of first-line supervisors/managers of food
preparation and serving workers is projected to
increase by 12 percent (107,000 jobs) between 2014
and 2024, while the number of foodservice
managers is projected to rise by nearly 8 percent.
Non-foodservice jobs at eating-and-drinking
places — including operational, business, financial,
entertainment, sales, administrative and transportation occupations — are projected to grow by nearly
50,000 over the next 10 years.
Total Restaurant-and-Foodservice
Employment (millions)
14.8
13.5
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. Arizona and Texas are projected to
set the pace with restaurant-and-foodservice job growth above 15 percent between
2014 and 2024. Florida (15.0 percent),
Nevada (14.7 percent) and Georgia (14.4
percent) also are expected see their
restaurant employment base expand at
rates well above the national average
during the next 10 years.
In terms of total jobs added, Texas is
expected to lead the way with 170,800
restaurant-and-foodservice jobs added
between 2014 and 2024. California is
projected to add 141,100 industry jobs,
while Florida’s restaurant workforce is
expected to expand by 134,600 jobs.
Labor Challenges
Beginning to Reemerge
As the economy continues to inch closer
to full recovery, it is inevitable that
restaurant operators’ competition for
employees will become more intense. The
NRA asked restaurant operators in
December 2013 to rate the degree to
which recruiting and retaining employees
is a challenge for their business.
A solid majority of operators across all
segments — including more than eight of
10 quickservice and fast casual operators
— said recruiting and retaining employees is a significant or moderate challenge
for their business.
Looking ahead to 2014, nearly
one-half of quickservice, fast casual and
casual dining operators say they expect
recruiting and retaining employees to
become more difficult for their business.
Fine-dining operators were the least likely
to express concern about competition for
labor, but even one-quarter of them say it
will likely become more challenging in
2014.
As a result, restaurant operators across
all segments intend to focus more on
labor issues in 2014. Roughly one-half of
limited-service operators say they plan to
devote more resources to recruiting and
retaining employees in 2014, while less
than one of 10 plan to cut back in this
area. Similarly, nearly half of fine-dining
and casual-dining operators plan to spend
more on finding and keeping employees
in 2014.
Training Budgets on the
Rise
Restaurant operators also are bolstering
their training budgets in an effort to
develop their employees, as well as
enhance the overall productivity of their
operation. These actions are most
common in the quickservice segment,
where 69 percent of operators expect to
devote more of their resources to training
in 2014 and just a small fraction expect to
cut their training budget.
Restaurant Operators Rate the Challenge of
Recruiting and Retaining Employees
FamilyCasual
Fine
Fast
DiningDiningDining QuickserviceCasual
Recruiting and Retaining Employees in 2013
11.9
Significant challenge
32%
40%
30%
46%
43%
Moderate challenge
46%
38%
46%
39%
41%
Little or no challenge
22%
22%
24%
15%
17%
Expectations for Recruiting and Retaining Employees in 2014
2004
2014*
*Projected
2024*
More challenging
33%
44%
26%
Less challenging
10%
18%
11%
14%
11%
Remain about the same 58%
39%
63%
40%
13%
18
46%
46%
Employee Turnover Trending Upward
From Recession Lows
Restaurant Operators Plan
to Focus More on Recruiting
and Retaining Employees
50%
48%
47%
46%
36%
4%
3%
Family
dining
Casual
dining
Fine
dining
6%
3%
1%
Quickservice
Fast
Casual
Devote More Resources in 2014
Devote Fewer Resources in 2014
Source: National Restaurant Association, Restaurant
Trends Survey, 2013
Turnover Remains Below Pre-Recession Rates
Annual turnover rates**: restaurants and accommodations sector versus
total U.S. private sector
Prime Restaurant Labor
Pool is Shrinking
82.7%
While an improving economy will gradually
tighten the labor market in the near term,
shifting demographics will have an even more
significant impact on the restaurant industry
in the years ahead. In its latest labor force
projections, the Bureau of Labor Statistics (BLS)
is forecasting a sharp decline in the restaurant
industry’s primary labor pool over the next
decade.
Between 2012 and 2022, BLS predicts that
the number of 16-to-24 year olds in the labor
force will plunge 13.3 percent. In absolute
terms, the number of available 16-to-24-yearolds — which currently account for four of 10
industry employees — will decline by 2.8
million in the next 10 years. This projected
drop will come on the heels of a 1.1 million
decline in this key labor force demographic
between 2002 and 2012.
Ramping Up Training
Proportion of restaurant operators
planning to devote more or less of their
resources to employee training in 2014
69%
59%
54%
44%
4%
2%
3%
Family
dining
Casual
dining
Fine
dining
The turnover rate in the hospitality sector rose for the second consecutive year in 2012, but
still remained well below pre-recession levels. The overall turnover rate in Restaurant &
Accommodations* sector stood at 60.8 percent in 2012, up roughly four percentage points
from the recent low of 56.6 percent in 2010.
Despite the increase, the turnover rate remains low in historical terms. In 2007, prior to
the economic downturn, the turnover rate of the Restaurant & Accommodations sector was
80.4 percent. This was on par with turnover in the previous five years (2002-2006), when
overall the annual rate averaged 80 percent.
In comparison, the average turnover rate for all private sector workers stood at 41.3
percent in 2012, essentially unchanged from the previous two years. The recent trends suggest
that the traditional labor challenges will more rapidly become a concern again for the
restaurant industry, relative to the rest of the economy.
Most sectors of the economy saw their overall turnover rates decline during the challenging economic environment of 2008 - 2010, as workers were less likely to quit their current jobs
with fewer other employment opportunities available.
50.4%
2006
80.4%
74.7%
Quickservice
60.8%
44.4%
40.5%
40.4%
41.3%
2007
2008
2009
2010
2011
2012
Total Private Sector
Restaurants and Accommodations
Source: Bureau of Labor Statistics
*Note that the turnover figures presented are for the broadly-defined Accommodations and Food Services sector,
because the Bureau of Labor Statistics does not report data for restaurants alone.
**Annual turnover rate is the number of total separations during the entire year as a percent of average annual employment
Taken together, the number of 16-to-24year-olds in the labor pool will fall by roughly 4
million between 2002 and 2022. This long-term
trend is due in large part to a sharp decline in
labor force participation in this demographic.
After peaking at 68.6 percent in 1989, the labor
force participation rate among this group fell to
54.9 percent in 2012. By 2022, BLS predicts that
fewer than 50 percent of 16-to-24-year olds-will
be in the labor force.
In addition, the population of the prime
restaurant labor pool is expected to shrink in
the years ahead. BLS projects the population of
16-to-24-year-olds to decline by 1.6 million
16-to-24-Year-Olds in the
Labor Force Projected to
Decline by 2.8 Million by 2022
A Growing Proportion
of Older Individuals Will
Remain in the Labor Force
Percent change in the labor force by age group
Labor force participation rate by age group
56.1%
Fast
Casual
Trends Survey, 2013
58.1%
48.3%
83.3%81.4%81.0%
2%
Devote More Resources in 2014
Devote Fewer Resources in 2014
56.6%
49.5%
56%
2%
61.1%
28.8%
1.9%
-4.8%
63.3%
54.9%49.6%
61.9%64.5%67.5%
13.2%
-0.5%
18.5%23.0%
-13.3%
Age 16-24
2002 to 2012
Age 25-54
2012 to 2022*
Age 55 and
older
Source: Bureau of Labor Statistics, *Projected
Age 16-24 Age 25-54 Age 55-64 Age 65 and
Older
2002
2012
2022*
Source: Bureau of Labor Statistics, *Projected
19
between 2012 and 2022, an increase of nearly
29 percent. This projected increase follows an
11.7 million gain in this labor force cohort
during the previous 10 years.
Older individuals also are expected to
remain in the labor force much longer than
they did in the past. According to BLS, the
labor force participation rate among individuals
age 65 or older will hit 23 percent in 2022, up
between 2012 and 2022, which follows an
increase of 3.4 million during the previous 10
years.
In contrast, the number of older workers
will rise sharply in the years ahead, due to the
aging of the baby boomers, as well as increasing
levels of labor force participation. According to
BLS, the number of individuals age 55 or older
in the labor force will rise by 9.4 million
sharply from 13.2 percent in 2002 and 18.5
percent in 2012.
The composition of the U.S. labor force is
changing rapidly, and restaurants will be one of
the most affected sectors in the years ahead.
Successful operators will find ways to not only
compete with other restaurants for employees,
but also with other industries across the
economy.
Restaurant Workforce Projected to Reach 14.8 Million by 2024
Growth in restaurant industry employment by occupation, 2014 to 2024
EMPLOYMENT CHANGE, 2014-2024
2014
2024
JobsTotal %Avg. Annual
EmploymentEmploymentAddedChange
% Change
TOTAL RESTAURANT INDUSTRY EMPLOYMENT
Food Service Managers
Food Preparation and Serving Related Occupations
Supervisors, food preparation and serving workers
Chefs and head cooks
First-line supervisors/managers of
food preparation and serving workers
Cooks and food preparation workers
Cooks
13,540,000
14,845,000
1,305,000
9.6%
0.9%
332,000
358,000
26,000
7.8%
0.8%
12,381,000
13,612,000
1,231,000
9.9%
1.0%
1,009,000
1,129,000
120,000
11.9%
1.1%
118,000
131,000
13,000
11.0%
1.1%
891,000
998,000
107,000
12.0%
1.1%
3,118,000
3,403,000
285,000
9.1%
0.9%
0.9%
2,270,000
2,479,000
209,000
9.2%
Cooks, fast food
550,000
577,000
27,000
4.9%
0.5%
Cooks, institution and cafeteria
436,000
479,000
43,000
9.9%
0.9%
0.0%
Cooks, private household
Cooks, restaurant
Cooks, short order
7,000
7,000
0
0.0%
1,080,000
1,212,000
132,000
12.2%
1.2%
170,000
174,000
4,000
2.4%
0.2%
Cooks, all other
Food preparation workers
Food and beverage serving workers
27,000
30,000
3,000
11.1%
1.1%
848,000
924,000
76,000
9.0%
0.9%
6,886,000
7,631,000
745,000
10.8%
1.0%
Bartenders
580,000
638,000
58,000
10.0%
1.0%
Fast food and counter workers
3,611,000
4,035,000
424,000
11.7%
1.1%
3,169,000
3,571,000
402,000
12.7%
1.2%
Combined food preparation and serving
workers, including fast food
Counter attendants, cafeteria,
food concession, and coffee shop
Waiters and waitresses
Food servers, non-restaurant
442,000
464,000
22,000
5.0%
0.5%
2,440,000
2,678,000
238,000
9.8%
0.9%
255,000
280,000
25,000
9.8%
0.9%
1,368,000
1,449,000
81,000
5.9%
0.6%
Dining room and cafeteria attendants and
bartender helpers
424,000
446,000
22,000
5.2%
0.5%
Dishwashers
540,000
577,000
37,000
6.9%
0.7%
Hosts and hostesses, restaurant, lounge, and
coffee shop
364,000
382,000
18,000
4.9%
0.5%
Other food preparation and serving related workers
All other food preparation and serving related
workers
Other Eating-and-Drinking Place Occupations*
40,000
44,000
4,000
10.0%
1.0%
827,000
875,000
48,000
5.8%
0.6%
*Includes operational, business, financial, entertainment, sales, administrative and transportation occupations
Source: National Restaurant Association projections, based on historical data from the Bureau of Labor Statistics
20
State Restaurant Industry Employment Growth
Projected growth in restaurant industry employment* from 2014 to 2024
EMPLOYMENT CHANGE, 2014-2024
2014
2024
JobsTotal %Avg. Annual
EmploymentEmploymentAddedChange
% Change
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
169,400
27,200
265,400
111,800
1,544,000
250,500
152,700
43,900
59,400
899,000
405,800
85,300
61,400
515,600
308,800
142,800
131,800
195,700
197,000
60,100
234,900
317,400
399,300
260,800
115,500
281,700
51,800
87,000
199,000
61,600
322,300
85,500
772,000
426,200
39,400
534,300
160,600
176,200
538,000
50,600
206,000
46,200
283,000
1,117,300
111,600
26,400
354,900
279,700
73,100
272,300
27,800
192,900
31,000
306,900
126,700
1,685,100
283,800
160,700
49,600
63,300
1,033,600
464,200
91,000
68,400
549,200
331,800
153,600
143,300
212,400
210,200
64,500
251,500
335,400
422,300
278,100
127,200
300,300
55,600
92,300
228,200
66,300
340,900
94,900
818,700
486,000
44,200
566,500
177,000
196,800
565,000
53,700
231,300
50,600
307,500
1,288,100
126,600
28,000
388,000
307,100
76,800
288,200
29,700
23,500
3,800
41,500
14,900
141,100
33,300
8,000
5,700
3,900
134,600
58,400
5,700
7,000
33,600
23,000
10,800
11,500
16,700
13,200
4,400
16,600
18,000
23,000
17,300
11,700
18,600
3,800
5,300
29,200
4,700
18,600
9,400
46,700
59,800
4,800
32,200
16,400
20,600
27,000
3,100
25,300
4,400
24,500
170,800
15,000
1,600
33,100
27,400
3,700
15,900
1,900
13.9%
14.0%
15.6%
13.3%
9.1%
13.3%
5.2%
13.0%
6.6%
15.0%
14.4%
6.7%
11.4%
6.5%
7.4%
7.6%
8.7%
8.5%
6.7%
7.3%
7.1%
5.7%
5.8%
6.6%
10.1%
6.6%
7.3%
6.1%
14.7%
7.6%
5.8%
11.0%
6.0%
14.0%
12.2%
6.0%
10.2%
11.7%
5.0%
6.1%
12.3%
9.5%
8.7%
15.3%
13.4%
6.1%
9.3%
9.8%
5.1%
5.8%
6.8%
1.3%
1.3%
1.5%
1.3%
0.9%
1.3%
0.5%
1.2%
0.6%
1.4%
1.4%
0.6%
1.1%
0.6%
0.7%
0.7%
0.8%
0.8%
0.7%
0.7%
0.7%
0.6%
0.6%
0.6%
1.0%
0.6%
0.7%
0.6%
1.4%
0.7%
0.6%
1.0%
0.6%
1.3%
1.2%
0.6%
1.0%
1.1%
0.5%
0.6%
1.2%
0.9%
0.8%
1.4%
1.3%
0.6%
0.9%
0.9%
0.5%
0.6%
0.7%
Fastest Restaurant
Job Growth
Projected growth in restaurantand-foodservice jobs, 2014 to 2024
1Arizona
2Texas
3 Florida
4Nevada
5 Georgia
6North Carolina
7Alaska
8Alabama
9Utah
10Arkansas
11Colorado
12Delaware
15.6%
15.3%
15.0%
14.7%
14.4%
14.0%
14.0%
13.9%
13.4%
13.3%
13.3%
13.0%
Largest Restaurant
Workforces
Number of restaurant-andfoodservice jobs in 2014
1California
2Texas
3 Florida
4New York
5 Pennsylvania
6Ohio
7 Illinois
8North Carolina
9 Georgia
10 Michigan
11 Virginia
12New Jersey
1,544,000
1,117,300
899,000
772,000
538,000
534,300
515,600
426,200
405,800
399,300
354,900
322,300
*Includes employment in all eating-and-drinking
place occupations, plus employment in foodservice positions that are not located at eating-anddrinking places
Source: National Restaurant Association projections, based on historical data from the Bureau
of Labor Statistics
21
The National Restaurant Association Educational Foundation, our state restaurant association
partners, National Restaurant Association members, and educators are investing in the future
workforce through ProStart.
ProStart’s Impact:
•Over 95,000 students this year
• 1,900 secondary schools
• 48 states, U.S. military bases and Guam
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Building Futures.
Learn more at NRAEF.org
© 2014 National Restaurant Association Educational Foundation. All rights reserved. ProStart is a registered trademark of the National Restaurant Association
Educational Foundation. The logo appearing next to ProStart is a trademark of the National Restaurant Association.
Tableservice Segment
To Post Modest Sales
Growth in 2014
“The National
Restaurant
Association
expects the
tableservice
segment’s
sales to total
$212.4 billion
in 2014, a
2.6 percent
increase over
its 2013 sales
of $207.0
billion.”
A
lthough the economy is several years into its recovery from the Great Recession,
consumers remain generally cautious. Their persistent uncertainty about the economy
has resulted in prolonged pullback on spending by many households, with consumer
spending growth at rates well below what would be expected during a normal economic
recovery.
On the bright side, NRA research shows that consumers’ pent-up demand for tableservice
restaurants remains relatively high by historical standards, which means they are poised to
increase patronage when their financial situation improves.
Driven by an expected improvement in the economic environment, the tableservice
restaurant segment is projected to continue to expand in 2014. The National Restaurant
Association expects the tableservice segment’s sales to total $212.4 billion in 2014, a 2.6 percent
increase over its 2013 sales of $207.0 billion.
In inflation-adjusted terms, total tableservice sales are projected to edge up 0.2 percent in
2014, the fourth consecutive year of real sales growth. However, it also represents the third
straight year of real sales growth below 1 percent, which illustrates the challenging business
environment that persists for tableservice operators.
Tableservice Restaurant Segment Sales Growth
3.5%
3.1%
2.6%
2.3%
1.1%
0.4%
0.2%
0.1%
2011
Nominal Sales Growth
2012
2013
2014*
Real (Inflation-adjusted) Sales Growth
Source: National Restaurant Association; *projected
23
Cautious Optimism for 2014
Setting the Bar Low
When asked in November 2013 to assess the
current state of business conditions for the
overall U.S. restaurant industry, tableservice
operators were generally negative. Less than
one percent of tableservice operators said
current business conditions were “excellent,”
while a majority described business
conditions as either “fair” or “poor.”
Forty-two percent of fine dining operators
said business conditions for the overall U.S.
restaurant industry were “good,” compared
with 34 percent of casual dining operator and
just 19 percent of family dining operators.
Looking ahead to 2014, the sentiment of tableservice operators
generally ranges from “more of the same” to somewhat
optimistic. Casual- and fine-dining operators are the most
bullish, with nearly four of 10 saying they expect their business
to be better in 2014 than it was in 2013. One of 10 casual- and
fine-dining operators think their sales will be down in 2014,
while one-half think business will remain about the same.
Family dining operators are somewhat less positive about
2014, with only 27 percent expecting their sales to improve.
Seven percent of family-dining operators think their sales will
decline in 2014, while two-thirds said business will probably
remain about the same.
With cost challenges likely to remain at the forefront, tableservice operators have lower
expectations for their profitability in 2014. Relative to their sales prospects, a higher proportion
of casual- and fine-dining operators are expecting profitability to be down in 2014. Among
family dining operators, 24 percent expect their profitability will improve in 2014, while 33
percent think it will be down.
Tableservice Operators’ Rating of
Business Conditions for the Overall U.S.
Restaurant Industry
Tableservice Operators’ Outlook for Sales and Profitability in 2014
fine Dining
Tableservice Sales in 2014
6%
52%
42%
55%
Casual Dining
52%
56%
34%
Fair
Good
19% 1%
Excellent
Better Than 2013
Trends Survey, 2013
Tableservice Operators’ Assessment
of Business Conditions for their Own
Restaurant
fine Dining
41%
6%
Casual Dining
41%
38%
9%
family Dining
Poor
39%
51%
Fair
Good
Excellent
Trends Survey, 2013
24
Fine Dining
About the Same as 2013
Family Dining Casual Dining
Fine Dining
Down From 2013
When it came to their own business,
tableservice operators were somewhat more
upbeat. Nearly one of 10 operators in each
tableservice segment said business conditions
for their own restaurant were “excellent,” while
four out of 10 described business conditions
as “good.” However, a majority of operators
still rated current business conditions for their
own restaurant as either “fair” or “poor.”
46%
10%
8%
6%
32%
25%
17%
64%
13%
31%
24%
7%
16%
7%
33%
27%
family Dining
Poor
51%
44%
43%
38%
37%
11%
Tableservice Profitability in 2014
66%
1%
Competition Remains
Strong
With the uneven economic recovery continuing to constrain spending, the competition
within the restaurant industry for consumers’
limited discretionary dollars remains intense.
Eight of 10 tableservice operators say
competing with other tableservice restaurants
posed a significant or moderate challenge for
their business in 2013. They don’t expect much
of a letup in 2014 either, with nine of 10
reporting that competition within the
tableservice segment will either become more
challenging or remain the same.
Tableservice operators also are battling
with the limited-service segment for customers, with three of four family dining and casual
dining operators reporting that competing
with quickservice or fast casual restaurants was
a significant or moderate challenge for their
business in 2013. A smaller proportion of
fine-dining operators report this as a challenge, but a majority of operators in each of the
three tableservice segments say competition
with the limited-service segment will remain
steady or intensify in 2014.
Traffic Growth Remains
Challenging
Given the extreme competition, it’s no
surprise that building business is among the
top concerns for tableservice operators. Nine
of 10 tableservice operators across all three
segments say that attracting new customers
was a significant or moderate challenge in
2013. Looking ahead, a similar proportion
expects these difficulties to get stronger or
remain steady in 2014.
The challenge to bring back repeat
customers was less of a concern for tableservice operators, and in fact roughly one-half of
tableservice operators say repeat customers
Tableservice Operators Reported Growth
in Repeat Business in 2013
Tableservice
Operators Rate …
Repeat customers as a proportion of total sales in 2013
versus 2012
55%
49%
Competitive Intensities
FamilyCasual
Fine
DiningDiningDining
Competing with Tableservice Restaurants in 2013
22%
51%
47%
46%
40%
23%
19%
Moderate challenge
58%
60%
60%
20%
17%
21%
5%
Family Dining
Larger amount of sales
Smaller amount of sales
4%
Casual Dining
3%
Fine Dining
About the same amount of sales
Expectations for Competing with Tableservice Restaurants
in 2014
More challenging
16%
27%
21%
Less challenging
11%
14%
9%
73%
60%
70%
Remain about the same
Competing with Quickservice or Fast Casual Restaurants in
2013
Moderate challenge
31%
45%
24%
23%
54%
24%
28%
Add/expand rewards program
17%
25%
26%
41%
Enhance food & menu quality
26%
20%
16%
Focus on quality of service
22%
21%
19%
6%
14%
14%
Focus on direct customer interaction 10%
7%
14%
11%
Expand social media presence
7%
12%
46%
Increase promotions & specials
5%
16%
21%
Keep prices low
67%
59%
67%
Train staff to improve service
Less challenging
25%
FamilyCasual
Fine
DiningDiningDining
13%
Expectations for Competing with Quickservice or Fast
Casual Restaurants in 2014
More challenging
Successful Loyalty Strategies Used by
Tableservice Operators in 2013
The Challenge of Building Business
FamilyCasual
Fine
DiningDiningDining
Focus on consistency
Email marketing/newsletter
7%
10%
5%
5%
6%
10%
3%
10%
6%
2%
1%
3%
9%
Attracting New Customers in 2013
45%
40%
36%
Moderate challenge
49%
53%
53%
9%
7%
11%
Expectations for Attracting New Customers in 2014
More challenging
Less challenging
46%
42%
4%
7%
37%
11%
50%
51%
51%
Bringing Back Repeat Customers in 2013
8%
11%
7%
Moderate challenge
54%
47%
33%
37%
42%
60%
Expectations for Bringing Back Repeat Customers in 2014
More challenging
18%
20%
12%
Less challenging
16%
19%
14%
66%
61%
74%
represented a larger amount of their sales in 2013 than they did in 2012.
Less than 5 percent of tableservice operators say repeat customers made
up a smaller amount of their sales in 2013.
The NRA also surveyed tableservice operators about successful
things that they did in 2013 to enhance customer loyalty and repeat
business. The addition or expansion of a rewards program top the list
among casual dining and fine dining operators, with roughly one of four
saying this was successful for them. Among family dining operators, the
most common successful strategy was to enhance the quality of their
food and menu items.
One of five operators across all three tableservice segments say they
saw positive results by placing additional focus on the quality of their
service, while operators also made additional efforts to increase the
direct interaction with their customers. Twelve percent of fine-dining
operators and seven percent of their family- and casual-dining counterparts said they found success by expanding their social media presence
in 2013.
25
Attracting Customers
Before restaurant operators can work on generating repeat business, they have to get customers in
the door the first time. When asked what factors
are important when it comes to choosing a
tableservice restaurant, consumers are most likely
to report good service and good value. Eight of 10
consumers say it’s important for a tableservice
restaurant to have some of their favorite items on
the menu, while nearly two-thirds say healthy
menu items are important to them.
Finding a tableservice restaurant that is
convenient to their home or work place is
important to two-thirds of consumers, while 57
percent say the ease of parking at the restaurant is
a key factor in choosing a tableservice restaurant.
Younger consumers tend to be more
adventurous in their restaurant selections, with a
majority of 18-to-34-year-olds saying important
factors are food they haven’t tried before and
restaurants they haven’t been to before.
Due to the importance of repeat business,
the NRA’s 2014 Restaurant Industry Forecast
takes a detailed look at the attitudes, prefer-
What Do Consumers Look For in a Tableservice Restaurant?
Attributes customers list as reasons for choosing a tableservice restaurant
All
Adults
Men Women
18
to 34
35
to 44
45
to 54
55
65 or
to 64Older
Good service
87%
86%
88%
89%
89%
82%
87%
86%
Good value
82%
81%
84%
84%
83%
81%
81%
82%
Some of their favorite items are on the menu
81%
77%
84%
78%
84%
81%
82%
81%
Convenience to their home or work place
65%
64%
66%
68%
68%
67%
56%
63%
Healthy menu items
64%
59%
68%
66%
59%
63%
65%
66%
Décor or atmosphere
63%
61%
65%
59%
66%
64%
64%
64%
Family or child friendly
58%
54%
62%
64%
62%
53%
50%
56%
Ease of parking at the restaurant
57%
56%
58%
52%
52%
57%
60%
66%
Locally sourced food
48%
44%
51%
47%
44%
48%
48%
53%
Restaurant they haven’t been to before
43%
43%
43%
52%
44%
38%
39%
37%
Food they haven’t tried before
40%
44%
37%
55%
38%
35%
33%
28%
Takeout or delivery options
39%
38%
41%
45%
50%
38%
32%
27%
Organic or environmentally friendly food
39%
33%
44%
43%
37%
35%
37%
37%
Technology options, such as smartphone apps, tablets or wi-fi 18%
19%
17%
24%
18%
17%
13%
11%
What Do Frequent Customers Look For in a Tableservice Restaurant?
Attributes frequent customers list as reasons for choosing a tableservice restaurant
Frequent
Frequent
FrequentOff-Premises
All
Fullservice QuickserviceDinner
AdultsCustomersCustomersCustomers
Good service
87%
90%
91%
90%
Good value
82%
84%
87%
82%
81%
82%
84%
81%
65%
70%
72%
69%
58%
Healthy menu items
64%
61%
61%
63%
67%
65%
67%
58%
51%
59%
55%
57%
57%
59%
55%
48%
44%
41%
44%
43%
45%
48%
43%
40%
41%
40%
42%
Takeout or delivery options
39%
39%
47%
53%
39%
34%
35%
37%
Technology options, such as smartphone apps, tablets or wi-fi 18%
20%
22%
19%
26
Good Service
and value are
the most important
factors for consumers
when choosing a
tableservice
restaurant.
ences and motivations of frequent restaurant
customers to help restaurant operators attract
this important demographic in today’s
challenging business environment.
Three categories of frequent restaurant
customers were created for this analysis:
• Frequent Fullservice Customers: These
customers eat a meal at a sit-down restaurant
with waiter or waitress service more than once
a week, on average.
• Frequent Quickservice Customers: These
customers purchase a meal or snack from a
quickservice restaurant or carry-out place more
than once a week, on average.
• Frequent Off-Premises Dinner Customers: These customers purchase their dinner
meal from a restaurant, carry-out or delivery
place and eat it at home more than once a week,
on average.
Each of these customer groups rely heavily
on the restaurant industry in their daily lives.
As such, it is important for restaurant operators
to know how to reach these customers, what
their tastes and preferences are, and what
motivates their restaurant decisions.
When it comes to choosing a tableservice
restaurant, the factors that are important to
frequent restaurant customers are generally in
line with the overall adult population. However,
one key difference is the desire for off-premises
options. Fifty-three percent of frequent
off-premises dinner customers and 47 percent
of frequent quickservice customers say these
off-premises options are a deciding factor for
them. Thirty-nine percent of all adults reported
similarly.
Building Off-Premises Business
The off-premises market is a growing part of the foodservice business, and savvy tableservice
operators are positioning themselves to take advantage of this trend. One-half of family dining
and casual dining operators and 37 percent of fine dining operators say they plan to make
additional efforts to expand the off-premises side of their business in 2014.
This business strategy is timely because a growing proportion of consumers are seeking
out off-premises options at tableservice restaurants. Fifty-six percent of consumers say they
would likely order delivery from a tableservice restaurant directly to their home or office,
while 46 percent say they would utilize curbside takeout from a tableservice restaurant.
Younger consumers and frequent quickservice and off-premises dinner customers are much more
likely to say they would take advantage of these off-premises options at tableservice restaurants.
Building Off-Premises Frequency
Percent of adults who say they are likely use the following
off-premises options at tableservice restaurants
Delivery From
a TableserviceCurbside
RestaurantTakeout from
Directly to
a Tableservice
Demographic GroupHome or Office
Restaurant
All Adults
56%
46%
59%
18 to 34 Years Old
72%
35 to 44 Years Old
65%
52%
45 to 54 Years Old
61%
47%
55 to 64 Years Old
40%
36%
65 Years or Older
27%
24%
Frequent fullservice
customers
61%
44%
Frequent quickservice
customers
70%
56%
Frequent off-premises
dinner customers
69%
55%
Tableservice Operators
Planning to Expand
Off-Premises Options in
2014
Family
Dining
52%
Fine
Dining
49%
Casual
Dining
37%
Restaurant Trends Survey, 2013
Roughly two-thirds of
tableservice operators are planning
to invest more in email and text
message marketing in 2014.
Successful Marketing
Strategies
Not surprisingly, the best ways of reaching
customers varies significantly by age. Younger
consumers are much more likely than older
adults to say they would be receptive to a
tableservice restaurant communicating with
them by Facebook, Twitter, email or text
messages.
Frequent restaurant customers also are more
likely than the general public to indicate they
would be receptive to social media and
electronic marketing methods.
For their part, tableservice operators are
making the investments to more effectively
reach customers in the digital world. Nearly
three of four fine-dining and casual-dining
operators and more than three of five family
dining operators say they plan to devote more
resources to social media marketing in 2014. In
addition, roughly two-thirds of tableservice
operators are planning to invest more in email
and text message marketing in 2014.
In contrast, tableservice operators across all
three segments are planning to reduce the
amount of resources that they spend on
traditional marketing, such as direct mail or
newspaper ads.
Getting to Yes
In a challenging business environment,
determining what nudges customers to choose
one restaurant over another can give an operator
a competitive advantage. Word of mouth has
always been a restaurant’s best source of
advertising, and that holds true even in today’s
technology-driven world. More than nine of 10
consumers say they are likely to factor a
recommendation from a family member or
friend into their decision to choose a restaurant.
Frequent restaurant customers and younger
adults are more likely to incorporate information from websites and social media into their
decision-making process, as well as being
influenced by special offers though programs,
such as Groupon or LivingSocial.
27
Younger consumers are much more
likely than older adults to say
they would be receptive to a
tableservice restaurant
communicating with them
electronically.
Younger Consumers are More Receptive to Social Media and Electronic Marketing
Percent of consumers who would likely be receptive to the following marketing methods by tableservice restaurants
Frequent
Frequent
All
18
35
45
55
65 or Fullservice QuickserviceDinner
Adults to 34 to 45
to 54
to 64OlderCustomersCustomersCustomers
Notification of specials or events through
social media like Facebook or Twitter
36%
50%
46%
34%
22%
15%
41%
45%
43%
Email notifications of daily specials
34%
46%
35%
36%
28%
18%
42%
46%
48%
Cell phone text message notifications of
daily specials
27%
38%
32%
27%
16%
12%
35%
41%
38%
Marketing Goes Digital
Percent of tableservice operators planning to devote more or less of their resources to the
following marketing methods in 2014
Family Dining
More
Fewer
Resources Resources
Casual Dining
More
Fewer
Resources Resources
Fine Dining
More
Fewer
Resources Resources
Traditional marketing (such as
direct mail or newspaper ads)
14%
27%
19%
33%
12%
30%
Electronic marketing (such as email
or text messages)
65%
6%
64%
2%
67%
0%
Social-media marketing (such as
Facebook ads or special offers
via Twitter and Foursquare)
62%
4%
72%
1%
74%
1%
More than
nine of 10
consumers say
they are likely to
factor a recommendation from a
family member or
friend into their
decision to choose
a restaurant.
Factors that Go Into Choosing a Restaurant
Percent of consumers who say the following items are likely to factor into their decision when choosing a restaurant
Frequent
Frequent
All
18
35
45
55
Adults to 34 to 45
to 54
Recommendation from family member
or friend
92%
96%
Restaurant review in a newspaper,
magazine or online dining guide
94%
94%
89%
82%
97%
96%
94%
57%
59%
59%
59%
57%
51%
61%
61%
58%
Advertisement or promotion received by email 44%
47%
45%
51%
42%
32%
50%
53%
49%
A special offer through programs like
Groupon or Living Social
42%
50%
49%
42%
37%
26%
53%
54%
52%
Information on a consumer-driven
review site, such as Yelp
33%
49%
34%
34%
20%
12%
37%
45%
38%
Information on social media tools such as
Facebook or Twitter
32%
46%
41%
32%
17%
8%
34%
42%
39%
28
Filling Seats During Off-Peak Periods
W
ith consumers’ pent-up demand for
restaurants remaining near historically
high levels, they often are looking for ways to
increase restaurant frequency while staying
within their budget. One way restaurant
operators can help in this area is by cutting
menu prices during times when the restaurant isn’t as busy.
Roughly one of four family- and casualdining operators and 36 percent of fine-dining
operators say they currently offer off-peak
dining at reduced prices. In addition, a
majority of operators believe this will become
more popular in their segment in the future.
The demand is certainly there among
consumers, with 72 percent of adults saying
they would consider dining out more often if
menu prices were lower during off-peak times.
Off-Peak Specials
Frugal Flexibility
62%
53%
51%
36%
28%
23%
Fine Dining
Tableservice operators who currently offer off-peak dining at reduced prices
Tableservice operators who believe it will become more popular in this segment in the future
Trends Survey, 2013
Among frequent quickservice and off-premises dinner customers, eight of 10 said they
would likely take advantage of this option.
Controlling Costs
In addition to focusing on ways to build business, operators are well aware of the
pressures on the cost side of their operation. The vast majority of tableservice
operators say food costs, labor costs, and gas/energy/utility costs all posed
significant or moderate challenges for their business in 2013. Looking forward, the
expectation is that there will be very little abatement of these concerns in 2014.
Challenges Continue
Looking ahead to 2014, tableservice operators expect to face many of the same
challenges they did in 2013. Topping the list among family dining and casual
dining operators is complying with health care reform. In the fine dining segment,
the economy is the most frequently mentioned response among operators.
Tableservice Operators Expect Legislative &
Regulatory Issues to Pose Challenges in 2014
Top challenges expected by tableservice operators in 2014
FamilyCasual
Fine
DiningDiningDining
Health Care Reform
25%
22%
16%
The Economy
10%
11%
24%
Government
21%
8%
6%
Building & Maintaining Sales Volume
9%
14%
7%
Food Costs
7%
8%
10%
Recruiting & Retaining Employees
6%
10%
6%
Competition
5%
8%
7%
Minimum Wage Increase
9%
3%
7%
Labor Costs
4%
6%
1%
Profitability
2%
4%
3%
Percent of consumers who say they
would consider dining out more often
if menu prices were lower during
off-peak times
All Adults
72%
18-to-34 Years Old
77%
35-to-44 Years Old
76%
45-to-54 Years Old
74%
55-to-64 Years Old
68%
65 Years or Older
61%
Frequent Fullservice Customers
75%
Frequent Quickservice Customers
80%
Frequent Off-Premises Dinner
Customers
81%
Source: National Restaurant Association, National
Household Survey, 2013
Tableservice Operators Expect Cost
Crunch to Continue
FamilyCasual
Fine
DiningDiningDining
Food Costs in 2013
Moderate challenge
49%
47%
4%
54%
42%
5%
30%
63%
7%
Expectations for Food Costs in 2014
More challenging
75%
Less challenging
4%
22%
63%
7%
29%
59%
4%
37%
Labor Costs in 2013
Moderate challenge
60%
37%
2%
60%
37%
2%
51%
46%
3%
Expectations for Labor Costs in 2014
More challenging
75%
Less challenging
2%
23%
72%
4%
24%
62%
1%
37%
Gas/Energy/Utility Costs in 2013
Moderate challenge
39%
50%
11%
33%
53%
14%
Expectations for Gas/Energy/Utility Costs in 2014
More challenging
46%
55%
Less challenging
13%
7%
41%
39%
48%
9%
43%
47%
49%
4%
29
National Restaurant Association
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Deloitte
Limited-Service Segment
Continues to Lead Industry
Sales Growth in 2014
“The National
Restaurant
Association
expects the
limitedservice
eating-place
segment* to
post total sales
of $234.9
billion in 2014,
a 4.4 percent
increase over
its 2013 sales
volume of
$224.9 billion.”
*The limited-service eating-place segment
consists of three categories: limited-service
restaurants (which includes both quickservice and fast casual), cafeterias, grill-buffets
and buffets, and snack-and-nonalcoholicbeverage bars. In the text that follows, the
term “limited-service” refers to the broadly
defined limited-service eating-place
segment.
I
n the midst of an economic recovery that has been defined by tightened purse strings, the
limited-service restaurant segment has performed relatively well. Limited-service restaurant sales and traffic levels continue to improve, despite an uneven economy and dampened consumer confidence.
Meanwhile, NRA research shows that consumers’ pent-up demand for both on- and
off-premises dining remains elevated by historical standards, which suggests that customer
demand will continue to grow as the economy improves.
The National Restaurant Association expects the limited-service eating-place segment* to
post total sales of $234.9 billion in 2014, a 4.4 percent increase over its 2013 sales volume of
$224.9 billion. In inflation-adjusted terms, overall limited-service sales are expected to increase
2.1 percent in 2014, down slightly from a 2.4 percent real gain in 2013.
Within the broadly defined segment, limited-service restaurant sales are expected to total
$195.4 billion in 2014, up 4.4 percent from 2013. Snack-and-nonalcoholic-beverage bars are
projected to register sales of $30.7 billion, a 5.0 percent increase over 2013. Cafeterias,
grill-buffets and buffets are expected to post sales of $8.8 billion in 2014, a 2.5 percent gain
over 2013.
Projected 2014 Limited-Service Sales Growth
5.0%
4.4%
2.7%
2.5%
2.1%
0.1%
Limited-Service Restaurants
Nominal Sales Growth
Snack and Nonalcoholic
Beverage Bars
Cafeterias, Grill-Buffets,
and Buffets
Real (Inflation-adjusted) Sales Growth
31
Mixed Forecast for 2014
State of the LImitedService Industry
In general, limited-service operators’
assessment of the restaurant industry remains
relatively downbeat. When asked in November 2013 to assess current business conditions
for the overall U.S. restaurant industry, none
gave a rating of “excellent.” Only 31 percent of
fast casual operators and 22 percent of
quickservice operators said business
conditions were “good,” while the vast
majority gave ratings of either “fair” or “poor.”
The uncertainty that remains among limited-service operators is illustrated in their outlook for
sales and profitability in 2014. A majority of fast casual operators expect to have stronger sales
in 2014, while just 5 percent are anticipating a sales decline. Quickservice operators were
somewhat less optimistic, with 29 percent forecasting higher sales in 2014 and less than one in
10 expecting a sales decline.
On the profitability front, the outlook within the limited-service segment is quite divergent.
One-half of fast casual operators expect their profitability to improve in 2014, while just 16
expect a decline. In contrast, only about one in five quickservice operators think their business
will be more profitable in 2014, while two in five expect the opposite.
Limited-Service Operators’ Outlook for Sales and Profitability in 2014
Limited-Service Sales in 2014
50%
62%
Limited-Service Operators’ Rating of
Business Conditions for the Overall
U.S. Restaurant Industry
Better Than 2013
5%
Fast Casual
About the Same as 2013
Quickservice
Fast Casual
Down From 2013
Fast Casual
7%
62%
Poor
34%
16%
Quickservice
22%
40%
22%
29%
9%
65%
38%
55%
40%
Quickservice
13%
Limited-Service Profitability in 2014
Fair
31%
Good
1/2
Excellent
Number of fast casual operators who expect their
profitability to improve in 2014
Trends Survey, 2013
Speaking about their own business,
limited-service operators took a more
positive tone. One of 10 limited-service
operators said business conditions for their
own restaurant were “excellent,” while four of
10 said conditions were “good.” Still, one-half
of limited-service operators said their
business conditions remained in the “fair” or
“poor” categories, which indicates that the
segment is not yet running on all cylinders.
Limited-Service Operators’ Assessment
of Business Conditions for their Own
Restaurant
Quickservice
10%
41%
40%
9%
43%
38%
11%
Fast Casual
9%
Poor
Fair
Good
Excellent
Trends Survey, 2013
32
Assessing the Competition
Among all foodservice options available to
customers, limited-service operators say
competition is the most intense within their own
segment. Eighty-eight percent of quickservice
operators and 84 percent of fast casual operators
say competing with other limited-service
restaurants posted a significant or moderate
challenge for their business in 2013. They don’t
expect to get a reprieve in 2014, with more than
nine of 10 operators expecting it to become
more challenging or remain about the same.
Limited-service operators were much less
likely to express concerns about tableservice
restaurants, with only about one of 20 operators
saying tableservice competition was a
significant challenge for their business. Looking
forward to 2014, limited-service operators are
more likely to report tableservice competition
will become less of an issue for them, as
opposed to becoming more challenging.
Fast casual operators are more likely to
identify grocery stores as competitors, with 16
percent reporting a significant challenge and
41 percent reporting a moderate challenge for
their business.
Building Business
In today’s challenging environment, a top priority
for operators across all segments remains
expanding their customer base. Among limitedservice operators, more than nine of 10 say that
attracting new customers posed a significant or
moderate challenge for their business in 2013. In
terms of their expectations for 2014, the vast
majority expect attracting customers to be at least
as difficult as it was in 2013.
Getting customers to return was much less
of a concern for limited-service operators, with
about four of 10 fast casual operators and
about one-quarter of quickservice operators
saying this caused little or no challenge for
their business in 2013.
In fact, nearly six of 10 limited-service
operators say repeat customers represented a
larger amount of sales in 2013 than they did in
2012, while less than one of 10 say repeat
customers’ share of sales declined.
Limited-Service Operators Rate the
Challenge of Building Business
Limited-Service
Operators Assess the
Competition
Attracting New Customers in 2013
Moderate challenge
Fast
QuickserviceCasual
Competing with Quickservice or Fast Casual Restaurants
in 2013
36%
30%
Moderate challenge
52%
54%
12%
16%
Expectations for Competing with Quickservice or Fast
Casual Restaurants in 2014
More challenging
Less challenging
Fast
QuickserviceCasual
39%
41%
6%
7%
55%
52%
39%
55%
6%
48%
50%
2%
Expectations for Attracting New Customers in 2014
More challenging
Less challenging
42%
5%
53%
50%
11%
39%
Bringing Back Repeat Customers in 2013
Moderate challenge
12%
65%
23%
14%
48%
38%
Expectations for Bringing Back Repeat Customers in 2014
More challenging
Less challenging
23%
11%
66%
16%
20%
64%
Competing with Tableservice Restaurants in 2013
3%
5%
Moderate challenge
37%
45%
60%
50%
Expectations for Competing with Tableservice Restaurants
in 2014
More challenging
9%
13%
Less challenging
18%
21%
73%
66%
Limited-Service Operators Reported
Growth in Repeat Business in 2013
Repeat customers as a proportion of total sales in 2013
vs. 2012
57%
58%
40%
35%
7%
3%
Quickservice
Competing with Grocery Stores in 2013
6%
16%
Moderate challenge
45%
41%
48%
43%
Expectations for Competing with Grocery Stores in 2014
More challenging
15%
24%
Less challenging
22%
18%
63%
58%
About the same amount of sales
Successful Loyalty Strategies Used by
Limited-Service Operators in 2013
Fast
QuickserviceCasual
Competing with Convenience Stores in 2013
Larger amount of sales
Smaller amount of sales
Fast Casual
9%
5%
Moderate challenge
42%
39%
49%
55%
Expectations for Competing with Convenience Stores in
2014
More challenging
14%
Less challenging
18%
20%
21%
68%
59%
Focus on quality of service
Add/expand rewards program
Enhance food and menu quality
Increase promotions and specials
Train staff to improve service
Focus on direct customer interaction
Expand social media presence
Increase community involvement
Keep prices low
Expand marketing efforts
30%
23%
16%
11%
5%
5%
5%
5%
7%
7%
21%
23%
17%
10%
13%
10%
6%
6%
4%
2%
33
Putting Out the Welcome Mat
To attract customers in a competitive business
environment, restaurant operators need to know
what attributes are the most attractive to
customers. When asked what factors are most
important when it comes to choosing a limitedservice restaurant, the vast majority of consumers
identify good service, good value, and that some
of their favorite items are on the menu.
Women are more likely than men to say they
look for limited-service restaurants with healthy
menu items (72 percent vs. 57 percent), locally
sourced food (54 percent vs. 46 percent), and
organic or environmentally friendly food (45
percent vs. 35 percent).
Younger consumers are more likely than
older consumers to say important factors in their
selection process are restaurants they haven’t
been to before and food they haven’t tried before.
Due to the importance of repeat business,
the NRA’s 2014 Restaurant Industry Forecast
takes a detailed look at the attitudes, preferences and motivations of frequent restaurant
customers, to help restaurant operators attract
What Do Consumers Look For in a Limited-Service Restaurant?
Attributes customers list as reasons for choosing a limited-service restaurant
All
Adults
Men Women
18
to 34
35
to 44
45
to 54
55
65 or
to 64Older
Good service
87%
87%
87%
89%
88%
86%
88%
81%
Good value
85%
83%
87%
86%
89%
86%
83%
79%
82%
80%
84%
82%
87%
82%
83%
78%
72%
71%
74%
81%
75%
70%
68%
62%
Healthy menu items
65%
57%
72%
67%
61%
64%
66%
64%
65%
62%
67%
57%
67%
67%
70%
68%
60%
57%
63%
64%
65%
58%
53%
56%
54%
53%
54%
54%
52%
55%
55%
53%
50%
46%
54%
53%
46%
49%
47%
51%
45%
45%
44%
54%
46%
39%
40%
37%
41%
35%
45%
45%
34%
39%
43%
39%
40%
43%
36%
52%
40%
35%
32%
29%
21%
22%
21%
33%
22%
20%
15%
7%
Technology options, such as smartphone apps,
ordering kiosks or wi-fi
What Do Frequent Customers Look For in a Limited-Service Restaurant?
Attributes frequent customers list as reasons for choosing a limited-service restaurant
Frequent
Frequent
All
Fullservice QuickserviceDinner
AdultsCustomersCustomersCustomers
Good service
87%
86%
92%
Good value
85%
83%
90%
86%
82%
82%
87%
84%
90%
72%
77%
82%
77%
Healthy menu items
65%
62%
62%
59%
60%
65%
64%
65%
60%
52%
59%
58%
54%
56%
57%
56%
50%
50%
44%
47%
45%
43%
46%
45%
Technology options, such as smartphone apps,
ordering kiosks or wi-fi
41%
37%
37%
38%
40%
42%
41%
42%
21%
23%
30%
27%
34
Good Service
and value are
the most important
factors for consumers
when choosing a
limited-service
restaurant.
Expanding the Core
Business
Off-premises traffic is a key driver of
limited-service growth, and a majority of
operators say they are continuing to focus
on growing this side of their business.
Three-quarters of fast casual operators and
just over half of quickservice operators say
they plan to make additional efforts to
expand the off-premises side of their
business in 2014.
These efforts will likely be well received
by customers, as 55 percent of adults say
they would likely order delivery from a
limited-service restaurant directly to their
home or office. Younger consumers and
frequent quickservice and off-premises
dinner customers are much more likely to
say they would utilize limited-service
delivery directly to their home or office.
Dialing for Food
Percent of adults who say they would
use delivery options by limited-service
restaurants
All Adults
55%
18 to 34 Years Old
71%
35 to 44 Years Old
66%
45 to 54 Years Old
59%
55 to 64 Years Old
37%
65 Years or Older
26%
Frequent fullservice customers
57%
this important demographic in today’s
challenging business environment.
Three categories of frequent restaurant
customers were created for this analysis:
• Frequent Fullservice Customers: These
customers eat a meal at a sit-down restaurant
with waiter or waitress service more than once
a week, on average.
• Frequent Quickservice Customers: These
customers purchase a meal or snack from a
quickservice restaurant or carry-out place more
than once a week, on average.
• Frequent Off-Premises Dinner Customers:
These customers purchase their dinner meal from
a restaurant, carry-out or delivery place and eat it
at home more than once a week, on average.
Each of these customer groups rely heavily
on the restaurant industry in their daily lives.
As such, it is important for restaurant operators
to know how to reach these customers, what
their tastes and preferences are, and what
motivates their restaurant decisions.
When it comes to choosing a limited-service
restaurant, frequent restaurant customers are
similar to the general public in that their top
attributes are service and value. However, they
place a somewhat higher emphasis on convenience. Eighty-two percent of frequent quickservice customers and 77 percent of both frequent
off-premises dinner customers and frequent
fullservice customers say convenience to their
home or work place is an important factor in
choosing a limited-service restaurant, compared
with 72 percent of the overall adult population.
Successful Marketing
Strategies
To expand their customer base, as well as
generate repeat business, many limited-service
operators are shifting their marketing efforts to
reach customers directly. Nearly three-quarters
of fast casual operators and seven of 10
quickservice operators say they plan to invest
more in social media marketing in 2014. In
addition, a majority of both fast casual and
quickservice operators are planning to devote
Operators Ramp Up Social Media Marketing
Percent of limited-service operators planning to devote more or less of their
resources to the following marketing methods in 2014
Quickservice
More
Fewer
Resources Resources
Fast Casual
More
Fewer
Resources Resources
Frequent quickservice customers 70%
Traditional marketing (such as direct mail
or newspaper ads)
14%
18%
26%
34%
Frequent off-premises dinner
customers
Electronic marketing (such as email or
text messages)
57%
0%
67%
2%
Social-media marketing (such as Facebook ads
or special offers via Twitter and Foursquare) 68%
2%
73%
2%
68%
Source: National Restaurant Association, National
Household Survey, 2013
Younger Consumers are More Receptive to Social Media and Electronic Marketing
Percent of consumers who would likely be receptive to the following marketing methods by limited-service restaurants
Frequent
Frequent
All
18
35
45
55
Adults to 34 to 45
to 54
Notification of specials or events through
social-media like Facebook or Twitter
29%
43%
40%
29%
12%
9%
33%
43%
41%
Email notifications of daily specials
29%
38%
33%
33%
18%
14%
33%
40%
38%
Cell phone text message notifications of
daily specials
26%
37%
31%
28%
13%
10%
31%
38%
37%
35
more resources to email and text message marketing in 2014.
In contrast, both quickservice and fast casual operators are planning to devote
fewer resources to traditional marketing, such as direct mail or newspaper ads.
NRA research shows that many consumers are receptive to these forms of
marketing, though it varies by age. Younger consumers are much more likely than
older adults to say they would be receptive to a limited-service restaurant
communicating with them via Facebook, Twitter, email or text messages.
Frequent restaurant customers are also more likely than the overall population
to say they would be receptive to social media and electronic marketing from
limited-service restaurants.
Addressing Cost Concerns
Limited-Service Operators
Expect Cost Crunch to Continue
Fast
QuickserviceCasual
Food Costs in 2013
Moderate challenge
38%
59%
4%
58%
12%
30%
58%
11%
31%
64%
33%
3%
52%
43%
5%
77%
3%
20%
73%
5%
21%
37%
58%
4%
29%
54%
18%
Expectations for Food Costs in 2014
More challenging
Less challenging
In addition to sales challenges, limited-service operators continue to face cost
pressures across their operations. The vast majority of limited-service operators
said food costs, labor costs, and gas/energy/utility costs all posed significant or
moderate challenges for their business in 2013. Looking ahead, limited-service
operators expect these cost areas to continue to cause concerns in 2014.
Labor Costs in 2013
Challenges Lie Ahead
Expectations for Labor Costs in 2014
Although business conditions for the limited-service segment are expected to
improve in 2014, operators do not expect smooth sailing. Among the top concerns
is complying with health care reform, which is identified as the top anticipated
challenge in 2014 by 42 percent of quickservice operators.
Among fast casual operators, building and maintaining sales volume top the
list of business concerns for 2014, following closely by government, the economy,
and recruiting and retaining employees.
52%
43%
4%
Moderate challenge
More challenging
Less challenging
Gas/Energy/Utility Costs in 2013
Moderate challenge
Expectations for Gas/Energy/Utility Costs in 2014
Helping Customers Maintain Frequency
T
he combination of elevated pent-up demand for restaurants and
constrained spending ability means consumers are often looking for ways
to maintain or increase their restaurant frequency. Restaurant operators can
help fill this need by cutting menu prices during times when the restaurant
isn’t as busy.
About one-fifth of quickservice operators and one-tenth of fast casual
operators say they currently offer off-peak dining at reduced prices. However,
a higher proportion of operators in both segments believe this will become
more popular in the future.
NRA research also shows that customers would be receptive this option,
with more than seven of 10 adults saying they would consider dining out
more often if menu prices were lower during off-peak times. Among frequent
quickservice and off-premises dinner customers, eight of 10 said they would
likely take advantage of these lower prices.
Frugal Flexibility
Limited-service operators who
currently offer off-peak dining at reduced prices
Limited-service operators who believe it will become more popular in this segment in the future
45%
29%
22%
8%
Quickservice
Fast Casual
More challenging
Less challenging
49%
15%
35%
47%
7%
45%
Limited-Service Operators
Expect Legislative & Regulatory
Issues to Pose Challenges in 2014
Top challenges expected by limited-service
operators in 2014
Fast
QuickserviceCasual
Health Care Reform
42%
9%
17%
14%
Government
8%
16%
Building & Maintaining Sales Volume
5%
18%
Recruiting & Retaining Employees
6%
14%
Food Costs
5%
9%
Labor Costs
6%
5%
Minimum Wage Increase
5%
4%
Competition
0%
5%
Profitability
5%
0%
The Economy
36
Consumers Ready & Willing
To Embrace Restaurant
Technology Options
“Consumers
said they most
would like to
see restaurants
add the
following
technology
options:
loyalty
programs,
ordering,
reservations,
entertainment
and payment.”
T
echnology is quickly becoming a part of American life, and more consumers are
showing increasing interest in using technology at restaurants. NRA research shows
that a significant number of consumers are using such options or would be interested in
doing so if available at their favorite restaurants.
Technology can add convenience to the customer experience and help restaurant operations
be more productive and efficient. However, there are challenges to adding new customer-facing
technology, which leaves a gap between what consumers want and what restaurants currently
offer. Understanding how consumers prefer to interact with restaurants in the technology space
is crucial to helping operators strategically plan to close that gap.
While focusing on technology to enhance customer service and restaurant efficiency, it’s
important to remember that the human factor is still a vital aspect of the hospitality industry.
In fact, NRA research on industry trends in the year 2020 emphasizes that it will remain
important for restaurant operators to be high-touch in a high-tech environment, as consumers
will still expect personalized service.
Consumers Consider Tech Options when Choosing
a Restaurant
According to NRA research, nearly one-fifth of
consumers (18 percent) say technology options
are an important feature that factors into their
decision when choosing a tableservice
restaurant. As with many technology-related
issues, younger consumers are more likely to
feel that way than consumers in older age
groups: 24 percent of 18- to 34-year-olds say
they consider a restaurant’s technology options
when selecting where to go, compared to only
11 percent of individuals 65 and over.
Similarly, more than one-fifth of consumers (21 percent) 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.
In addition, individuals with children
under 18 in their household are more likely to
say that technology options factor into their
restaurant choices; 20 percent say they factor
it into their tableservice restaurant selection,
and 25 percent for their limited-service
choices.
37
Consumers Rely on Online Information
While the Internet is not the latest technology innovation, consumers rely on it to find information
about restaurant menus and concepts. Here too, younger consumers and individuals with children
in their household show a stronger reliance on online resources and activities.
Consumers Satisfy Restaurant Cravings Online
63% of consumers say they
recently used restaurant-related
technology options.
Consumers who have used the Internet for the following restaurant-related activities
AllAgeAgeAgeAgeAge
adults
18-34
35-44
45-54
55-64
65+
Children
under 18 in
household
Visit a restaurant’s website
59%
72%
71%
60%
49%
30%
69%
View a restaurant’s menu
58%
72%
67%
62%
47%
29%
68%
Find information about a restaurant they haven’t been
to before
55%
70%
64%
58%
46%
26%
63%
Place an order for takeout or delivery
43%
63%
52%
39%
24%
18%
53%
Search for nutrition information about restaurant food
34%
48%
38%
29%
26%
17%
39%
Make a reservation
33%
43%
36%
31%
29%
15%
39%
Post or read restaurant reviews on consumer-driven
sites like Yelp
27%
46%
28%
20%
19%
9%
33%
View a restaurant’s social media pages, like Facebook,
YouTube and Pinterest
22%
35%
24%
19%
14%
6%
27%
Purchase merchandise from a restaurant’s website
15%
20%
16%
15%
12%
7%
17%
5%
8%
3%
5%
3%
2%
5%
Follow restaurants on Twitter
Tech-Savvy Millennials Drive
Demand for Smartphone Options
Research from the NRA shows that a majority of consumers (63
percent) say they recently used restaurant-related technology options.
The most common uses: using a smartphone or tablet to find restaurant
locations and directions, ordering takeout/delivery, and looking up
nutrition information. In addition, consumers said they most would
like to see restaurants add the following technology options: loyalty
programs, ordering, reservations, entertainment and payment.
Following wider societal trends, younger consumers are more likely
to use a smartphone or tablet for restaurant-related activities, but a
significant number of older adults have used or are willing to use those
options.
Consumers Want a Side of
Technology with Their Meals
Percentage of adults who have recently used a smartphone
or tablet for restaurant-related activities*
46
23
19
13
13
6
Look up
Order takeout
Look up
locations and or delivery
nutrition
directions
information
Make a
reservation
Use rewards
or special
deals
Pay for
your meal
Source: National Restaurant Association, Technology Innovations Consumer Survey, 2013
*Survey conducted Oct. 3-6, 2013, asking for usage in the past month
Smart(phone) Restaurant Activities
Consumers who say they would be likely to use a smartphone or tablet for restaurant-related activities
AllAgeAgeAgeAgeAge
adults
18-34
35-44
45-54
55-64
65+
Children
under 18 in
household
Look up locations or directions
67%
88%
78%
63%
60%
31%
Order takeout or delivery
52%
74%
62%
45%
39%
20%
67%
Use rewards or special deals
50%
70%
58%
47%
38%
21%
65%
Make a reservation
46%
59%
60%
38%
40%
22%
56%
Look up nutrition information
42%
55%
46%
38%
35%
23%
54%
Pay for your meal
24%
43%
22%
16%
16%
9%
32%
Source: National Restaurant Association, Technology Innovations Consumer Survey, 2013
38
80%
In-Store Technology is on
Consumers’ Radar
While service and hospitality remain crucial features of dining out,
restaurant guests also are interested in controlling certain aspects of their
dining experience by self-activated systems for ordering and payment.
Again, younger adults and parents are trending stronger in this aspect.
Restaurant operators are starting to incorporate more in-store technology to speed up service and manage customer flow, but it isn’t yet commonplace to encounter these technologies when dining out. According to
NRA research, some tools — such as smartphone apps, online ordering,
video menu boards, and customer wi-fi — are by far the most common.
Devices such as tableside ordering and payment systems, iPad/tablet
menus, and touch-screen kiosks are currently offered by only a small
percentage of restaurants.
However, operators across segments believe that a wider range of
technology options will become more popular in the future. In the next
several years, consumers can expect to see more restaurants providing their
guests the option to leverage technology both during in-store visits and for
off-premise occasions.
iPad/tablet men
menus
nus a
and
nd
kiosks
touch-screen kiosks
fe
ered
are currently offered
tage
by a small percentage
of restaurants, butt
re
figure to become more
popular in the future.
VIEW
MENU
PLACE
ORDER
PAY
Using Technology to Help Yourself
Consumers who say they would be likely to use the following technology options in restaurants
AllAgeAgeAgeAgeAge
adults
18-34
35-44
45-54
55-64
65+
Children
under 18 in
household
Electronic payment system at the table
47%
65%
52%
46%
32%
23%
Electronic ordering system at the table
40%
61%
49%
34%
24%
15%
52%
Menus on iPad/Tablets
37%
57%
45%
34%
19%
15%
48%
Self-service, touch-screen kiosk for ordering
43%
62%
54%
42%
27%
18%
54%
55%
More Technology Options on the Horizon
Restaurant operators who believe these technology options will become more popular within their segments in the future
FamilyCasual
dining
dining
Fine
Fast
dining
QuickserviceCasual
Online ordering
57%
63%
48%
77%
89%
Ordering via smartphone app
45%
49%
30%
73%
88%
Electronic ordering at the table
28%
48%
30%N/AN/A
Electronic payment at the table
48%
65%
59%N/AN/A
Menu on iPad/tablet at the table
36%
54%
50%N/AN/A
56%N/AN/A
Wine/beer/cocktail list on iPad/tablet at the table
31%
53%
Wi-fi for customers
85%
93%
87%
87%
77%
Mobile/wireless payment options
43%
58%
54%
75%
77%
Nutrition information online or via
smartphone/tablet app
46%
57%
48%
80%
80%
Self-service, touch-screen ordering terminalsN/AN/AN/A
47%
57%
Video menu boardsN/AN/AN/A
78%
68%
39
Frequent Restaurant Customers Are Frequently Online
Frequent customers who have used the Internet for the following activities
Frequent Customers Are Prime
Technology Users
Frequent customers are a key audience for restaurant operators, as their usage of restaurant services is
higher than the general consumer population. NRA
research breaks down three distinct types of
frequent customers:
• Frequent tableservice customers. On average,
these customers eat a meal at a sit-down restaurant
with waiter or waitress service more than once a week.
• Frequent quickservice customers. On average,
these customers purchase a meal or snack from a
quickservice restaurant or carry-out place more than
once a week.
• Frequent off-premise dinner customers. On
average, these customers purchase their dinner meal
from a restaurant, carry-out or delivery place and
eat it at home more than once a week.
These restaurant guests also are more likely to use
technology, and they consider those options
important when choosing restaurants. Compared to
the 18 percent of all consumers, 20 percent of
frequent tableservice customers, 22 percent of
frequent quickservice customers, and 19 percent of
frequent off-premises dinner customers say technology options are an important factor when choosing a
tableservice restaurant. This is more pronounced in
the selection process for limited-service restaurants,
with 23 percent of frequent tableservice customers, 30
percent of frequent quickservice customers, and 27
percent of frequent off-premises dinner customers
saying technology is an important feature (compared
to 21 percent of all consumers).
Operators Devoting More
Resources to Technology
As restaurant operators navigate their strategic
options for incorporating more technology into
their operations, several challenges can make them
cautious to take the plunge into the technology pool.
According to NRA research, operators across
segments plan to allocate a larger proportion of their
budget and other resources to technology in 2014,
mainly in the customer-facing category. The fast
casual restaurant segment is leading the way: it has
the highest percentage of operators who say they
will increase their tech budgets in the coming year
for both front- and back-of-the-house.
Restaurant operators find the cost of implementation to be the highest barrier to adding more
technology options, with nearly three-quarters
citing it as the top challenge. Per-transaction/usage
costs and lack of infrastructure to support new
systems also are rated as top challenges.
40
Frequent
Frequent
All
tableservice quickservice dinner
adults
customers customers customers
Visit a restaurant’s website
59%
View a restaurant’s menu
58%
Find information about a restaurant
they haven’t been to before
55%
Place an order for takeout or delivery 43%
Search for nutrition information
about restaurant food
34%
Make a reservation
33%
Post or read restaurant reviews on
consumer-driven sites like Yelp
27%
View a restaurant’s social media pages,
like Facebook, YouTube and Pinterest 22%
Follow restaurants on Twitter
5%
68%
70%
70%
61%
65%
64%
66%
50%
66%
59%
64%
59%
41%
42%
42%
44%
39%
45%
35%
35%
33%
31%
3%
32%
6%
32%
4%
More Restaurant Visits, More Technology Use
Frequent customers who say they would be likely to use the following technology
options in restaurants
Frequent
Frequent
All
tableservice quickservice dinner
adults
customers customers customers
Electronic payment at the table
Electronic ordering at the table
Menus on iPad/Tablets
Self-service, touch-screen kiosk
47%
40%
37%
43%
53%
44%
42%
51%
60%
54%
48%
56%
58%
55%
47%
59%
Restaurants Are Investing in Technology
Restaurant operators who say they will devote more resources to technology in 2014
FamilyCasual
dining
dining
Customer-facing technology 41%
Front-of-the-house technology 28%
Back-of-the-house technology 24%
50%
35%
30%
Fine
dining
Quick-
service
Fast
casual
51%
23%
19%
43%
39%
33%
57%
47%
38%
Cost Is Top Challenge to Technology Expansion
Restaurant operators who consider the following to be challenges to
adding more customer-facing technology
Cost of implementation
Per transaction/usage cost
Lack of infrastructure to
support new systems
Service and repair
Customer acceptance
Staff training
FamilyCasual
dining
dining
Fine
dining
Quick-
service
Fast
casual
79%
43%
74%
39%
73%
34%
63%
44%
66%
28%
38%
38%
33%
39%
37%
37%
37%
32%
30%
34%
37%
36%
39%
40%
31%
40%
49%
28%
32%
25%
Restaurants Are Getting Social
99 p
er
cent
of fin
ed
oper ining
curre ators
nt
Face ly use
book
Over the past few years, social media has made remarkable headway as a marketing tool, as well as a customer
service feature among restaurants. In 2014, it’s more common than not for restaurants across segments to use
platforms such as Facebook and Twitter to promote their business, engage and inspire their communities, and
communicate with guests.
Restaurants are Ramping
Up their Tweets
Restaurants are Socially Active
Percentage of restaurant operators who are currently active on social media
67%
Percentage of restaurant operators who
plan to be more active on social media
in 2014
58%
36%
35%
59%
52%
49%
40%
31%
19%
13%
Family
Dining
71%
Casual
Dining
Very active
Family dining
75%
16%
6%
Somewhat active
Casual dining
Fine dining
6%
11%
Not active
Quickservice
Fast Casual
Fine
Dining
81%
Facebook Is King of Restaurant Social Universe
Restaurant operators who currently use the following social media channels
79%
Quickservice
Fast
Casual
78%
Source: National Restaurant Association, Restaurant Trends
Survey, 2013
Social Media Marketing
Continues to Grow
Percentage of restaurant operators who
believe social media will become a more
important marketing technique in the
future
Family
Dining
FamilyCasual
dining
dining
Facebook
Twitter
Blog on own website, or
platform like Tumblr
Online review sites, like Yelp
Video-sharing sites, like
YouTube or Vine
Image-sharing sites, like
Pinterest or Instagram
96%
50%
99%
53%
90%
49%
93%
78%
11%
56%
19%
62%
26%
71%
18%
39%
20%
65%
15%
22%
22%
28%
35%
19%
28%
26%
25%
44%
Social Media is Here to Stay
91
98%
85
43
42
32
99%
92%
Source: National Restaurant Association, Restaurant Trends
Survey, 2013
45
36
27
61
57
25
37
41
28
47
44
37
63
61
51
51
95%
83
76
73
59
Fast
Casual
Fast
casual
97%
45%
87
Casual
Dining
Quickservice
Quick-
service
Percentage of restaurant operators who say they are very likely to use the
following social media tools in the future
90%
Fine
Dining
Fine
dining
57
53 54 51
49
46
38
35
44
36 37
36
24
17
Family dining
Casual dining
Fine dining
Quickservice
Facebook
Twitter
Smartphone apps
Text messaging
Online review site
YouTube/Vine
Instagram/Pinterest
Fast Casual
Blog/Tumblr
41
Successful industry executives depend on the
National Restaurant Association
Discipline-specific study groups bring together
professionals who share vital areas of expertise
and years of experience. Each group’s free, focused
listserv community links executives with their peers
and solutions via e-mail. Meetings provide forums
for networking, sharing and learning best practices,
and opportunities for professional development.
Fast Casual Industry
Council
Marketing Executives
(MEG)
Pizzeria Industry Council
Nutrition
Financial Officers & Tax
Executives
Quality Assurance
Visit Restaurant.org/Events-Networking
Information Technology
Human Resources
Risk & Safety Managers
Supply Chain Management
iMIS Users Conference
Internal Audit
Help make the
healthful choice,
the easy choice.
Learn more about how to
get involved in the Kids
LiveWell initiative.
Visit Restaurant.org/
KidsLiveWell for more
information.
Sophisticated Consumers
Have High Expectations for
Dining-Out Experiences
“93 percent of
restaurant
operators say
they have
noticed their
customers
are growing
more
sophisticated
regarding
food and
restaurants.”
T
oday’s consumers are more knowledgeable about food and drinks than ever before.
They are increasingly interested in what is on their plates, where it comes from and how
it was prepared. This trend isn’t lost on restaurant operators: 93 percent say they have
noticed their customers are growing more sophisticated regarding food and restaurants.
On the consumer side, about three-quarters (76 percent) say that going out to a restaurant
with family and friends is a better use of their leisure time than cooking and cleaning up, and
nearly seven of 10 (67 percent) say that their favorite restaurant foods provide flavor and taste
sensations that can’t easily be duplicated at home.
To keep up with the evolution of consumer palates, restaurant operators continually add
new food and beverage items to their menus. The vast majority of operators across segments
added new food and beverage items to their menus in 2013 and plan to do so again in 2014.
Menu Renewal
Restaurant operators who added or plan to add new menu items
FamilyCasual
dining
dining
Fine
Fast
dining Quickservice casual
New food item in 2013
93%
93%
99%
88%
89%
New non-alcoholic beverage
item 2013
37%
52%
49%
62%
45%
New alcoholic beverage item in
2013 (of those serving alcohol) 83%
87%
91%
25%
55%
New food item in 2014
95%
96%
99%
85%
89%
New non-alcoholic beverage
item in 2014
38%
51%
52%
63%
53%
New alcoholic beverage item in
2014 (of those serving alcohol) 85%
88%
94%
21%
60%
Nearly seven of 10
consumers say their favorite
restaurant foods provide flavor and
taste sensations that can’t easily be
duplicated at home
43
Trends from the Kitchen
TOP 25 Tableservice Menu
Trends FOR 2014
1 Locally sourced meat and seafood
2 Locally grown produce
3Environmental sustainability
4Healthful kids’ meals
5 Gluten-free cuisine
6Hyper-local sourcing (e.g. restaurant
gardens)
7Children’s nutrition
8Non-wheat noodles/pasta (e.g. quinoa,
rice, buckwheat)
9 Sustainable seafood
The National Restaurant Association
teamed up with the American Culinary
Federation for the ninth straight year to
learn what professional chefs expect
menu trends to be, as presented in the
“What’s Hot in 2014” culinary forecast.
The survey found that local sourcing,
environmental sustainability and
children’s nutrition remain the top
trends, underscoring that these are true
trends rather than temporary fads.
In fact, sourcing, sustainability and
nutrition have stayed in the top 20
trends for the past five years. When
asked which trend likely would be a top
trend 10 years from now, 38 percent of
the chefs said environmental sustainability, 22 percent said local sourcing, and
18 percent said health and nutrition.
Trends that gained the most
momentum in this year’s chef survey
include nose-to-tail/root-to-stalk
cooking, pickling, ramen, dark greens
and Southeast Asian cuisine. On the flipside, Greek yogurt, sweet potato fries,
new cuts of meat, grass-fed beef and
organic coffee lost the most ground as
hot trends for 2014.
In addition, the chefs rated foam/
froth, bacon-flavored chocolate, fish
offal, gazpacho, fun-shapes children’s
items, mini-burgers, barnacles, flowers,
dust and molecular gastronomy as the
highest in the yesterday’s news category,
indicating that these items are waning
trends.
10 Farm/estate-branded items
11Nose-to-tail/root-to-stalk cooking
(e.g. reduce food waste by using entire
animal/plant)
12 Whole grain items in kids’ meals
13Health/nutrition
14New cuts of meat (e.g. Denver steak,
pork flat iron, tri-tip)
15Ancient grains (e.g. kamut, spelt,
amaranth)
16Ethnic-inspired breakfast items
(e.g. Asian-flavored syrups, Chorizo
scrambled eggs, coconut milk pancakes)
17 Grazing (e.g. small-plate sharing/
snacking instead of traditional meals)
Trends from the Counter
Limited-service restaurant operators are reporting similar overall trends as the chefs
do in What’s Hot in 2014, but with a few differences. While local sourcing and kids’
nutrition are in the top trends on both lists, spicy items, “build your own” items, and
pretzel bread are unique leading trends in this segment. Gluten-free items again
ranked as the No. 1 trend on limited-service menus.
When it comes to items that limited-service operators no longer consider hot
trends, energy drinks, doughnuts, breakfast wraps, paninis, and wraps top the
“yesterday’s news” list.
Top 25 Limited-Service Menu Trends for 2014
1 Gluten-free items
15 Sustainable seafood
18Non-traditional fish (e.g. branzino,
Arctic char, barramundi)
16Artisan/house-made items
3 Spicy items
19 Fruit/vegetable children’s side items
4 Fruit/vegetable sides in kids’ meals
17 Grain-based salads (quinoa,
couscous, etc.)
20Half-portions/smaller portions for a
smaller price
5 Locally sourced produce
18 Lower-sodium items
6 Locally sourced meat or seafood
19 Snack-sized items
21Hybrid desserts (e.g. cronut, townie, ice
cream cupcake)
7 “Build your own” items
20 Lower-fat items
8 Low-fat/non-fat milk or 100%
juice options in kids’ meals
21Egg white omelets/sandwiches
9 Pretzels/pretzel bread
23Asian/Asian fusion cuisine
23 Simplicity/back to basics
10 Flatbreads
24 Flavored/enhanced water
24 Quinoa
11 Specialty coffee
25 Smoothies
25Unusual/uncommon herbs (e.g. chervil,
lovage, lemon balm, papalo)
12Ethnic fusion cuisine
22Non-wheat flour (e.g. peanut, millet,
barley, rice)
Source: National Restaurant Association, What’s Hot in 2014
chef survey
22 Whole-grain items
13Organic items
14 Lower-calorie items
44
Just Because It’s Not
Trendy Doesn’t Mean
It’s Not Popular
Trends from the Bar
The What’s Hot in 2014 chef survey also examined the hottest
alcohol trends for the coming year. The top trends in beverage
alcohol tend to follow the overall themes of food trends. They focus
on local sourcing, including the most local of all − onsite production. However, the playfulness of mixology also is evident in the top
10 trends, showing off edible cocktails and food-cocktail pairings.
Trends that are cooling off, according to the chefs, include
shrubs, sour beer, vaporized cocktails, cocktails on tap, and
non-traditional flavored liquor (such as bacon or marshmallow);
those items topped the “yesterday’s news” list.
TOP 10 Alcohol Trends FOR 2014
Hot Trends
Perennial Favorites
1 Micro-distilled/artisan
spirits
1 Lagers
2 Locally produced beer/
wine/spirits
2Tequila/premium
tequila
3 IPAs (India Pale Ale)
While keeping an eye on the latest
food trends is important, many
consumers also are drawn to their
favorite menu items — trendy or
not — when choosing where to dine.
Incorporating tried-and-true dishes
will make for a well-rounded menu that
can satisfy all types of eaters, from the
adventurous to the picky. These items also can be
adjusted to fit a variety of menu types and themes by experimenting with flavor profiles and specialty ingredients.
The NRA surveyed chefs and limited-service restaurant
operators on which menu items were considered perennial
favorites. Popular items in both segments include Italian cuisine
and comfort food, although the rest of the top 20 lists differ to
reflect the menu composition in each segment.
Top 20 Perennial Favorites
Tableservice Menus
Limited-Service Menus
1 Italian cuisine
1 Soft drinks
2 Fried chicken
2 Poultry items
3 Barbeque
3 Milk
4 Frying
4 French fires
5Eggs Benedict
5Chicken sandwiches
6 Grilling
6 Pizza
7Oatmeal
7 Milkshakes
8 French toast
8 Side salads
9Comfort foods
(e.g. chicken pot pie,
meatloaf)
9Hamburgers/
cheeseburgers
11 Beef items
3Culinary cocktails
(e.g. savory, fresh
ingredients)
4 Sake/mirin
10 Fruit desserts (e.g.
cobbler, crisp, tart, pie)
5 Seasonal beer
11 Mexican cuisine
4Onsite barrel-aged
drinks
6 Signature cocktails
12 Zucchini
7 Wine flights/samplers
13 Short ribs
5 Regional signature
cocktails
8Craft beer/microbrew
14 Steaming
9House-brewed beer
15 Milkshakes/malts
6 “New Make” whiskey
10 Beer flights/samplers
16 Waffles
7 Gluten-free beer
8 Food-liquor/cocktail
pairings
9Edible cocktails
10 Food-beer pairings
What’s Hot in 2014 chef survey
17 Braising
18Cauliflower
19 French cuisine
10Chicken strips/nuggets
12Comfort food
13 Iced tea
14 Ice cream
15 Bottled water
16 Fruit juice
17 Pasta/Italian items
18 Soups
19Onion rings
20 Lemonade/flavored
lemonade
20Chicken wings
Sources: National Restaurant Association, What’s Hot in 2014 chef survey,
Restaurant Trends Survey, 2013
45
2014 Top Trends
Appetizers
1House-cured meats/
charcuterie
2
Vegetarian appetizers
Dessert
1Hybrid desserts (e.g.
cronut, townie, ice cream
cupcake)
3Ethnic/street foodinspired appetizers
(e.g. tempura, taquitos,
kabobs)
2
4Ethnic dips (e.g. hummus,
tabbouleh, baba ganoush,
tzatziki)
5Deconstructed classic
desserts
5Amuse-bouche/bite size
hors d’oeuvre
Starches/Side Items
1Non-wheat noodles/
pasta (e.g. quinoa, rice,
buckwheat)
Savory desserts
4Organic produce
Bite-size/mini-desserts
Breakfast/Brunch
1Ethnic-inspired breakfast
items (e.g. Chorizo
scrambled eggs, coconut
milk pancakes)
3
Black/forbidden rice
4
Red rice
3
5
Pickled vegetables
4Egg white omelets/
sandwiches
2
Sustainable seafood
3New cuts of meat (e.g.
Denver steak, pork flat
iron, tri-tip)
5
Yogurt parfait/Greek
yogurt parfait
Kids’ meals
2
3
Whole-grain items in kids’
meals
Fruit/vegetable children’s
side items
4Ethnic-inspired children’s
dishes
5Half-portions/smaller
portions for a smaller
prize or a smaller price
5Oven-baked items in kids’
meals (e.g. baked chicken
fingers, oven-baked fries)
Source: National Restaurant Association, What’s Hot in 2014 chef survey
Preparation
Methods
1
Pickling
2
Fermenting
3
Smoking
4
Sous vide
5
Liquid nitrogen chilling/
freezing
5Heirloom apples
Ethnic Cuisines
and Flavors
Culinary Themes
1Environmental
sustainability
1
Peruvian cuisine
2
2
Korean cuisine
3
Southeast Asian cuisine
(e.g. Thai, Vietnamese,
Malaysian)
3Hyper-local sourcing
(e.g. restaurant gardens)
4
Regional ethnic cuisine
5Ethnic fusion cuisine
Fresh fruit breakfast items
4Non-traditional fish
(e.g. branzino, Arctic char,
barramundi)
46
Locally grown produce
2Unusual/uncommon
herbs (e.g. chervil, lovage,
lemon balm, papalo)
4
Quinoa
Locally sourced meats
and seafood
1
3Dark greens (e.g. kale,
mustard greens, collards)
2
1
Produce
3House-made/artisan ice
cream
2Traditional ethnic
breakfast items (e.g.
huevos rancheros,
shakshuka, ashta)
Main Dishes/
Center of the Plate
by Category
Other Food Items/
Ingredients
1
Farm/estate-branded
items
2Ancient grains (e.g.
kamut, spelt, amaranth)
Gluten-free cuisine
4Children’s nutrition
5Nose-to-tail/root-to stalk
cooking (e.g. reduce food
waste by using entire
animal/plant)
Non-Alcoholic
Beverages
1House-made soft drinks/
soda/pop
2
3Non-wheat flour (e.g.
peanut, millet, barley, rice)
Gourmet lemonade
(e.g. house-made, freshly
muddled)
4Natural sweeteners
(e.g. agave, honey,
concentrated fruit juice,
maple syrup)
3Coconut water
5Artisan/specialty bacon
5Dairy-free milk (e.g. soy,
rice, almond)
4
Specialty iced tea
(e.g. Thai-style, Southern/
sweet, flavored)
Watch a video of What’s Hot in 2014
and more at Restaurant.org/FoodTrends.
Sourcing Close to Home
L
ocal sourcing doesn’t show up only as a top
menu trend for chefs and restaurant operators, but also among consumer preferences. NRA
research shows that 64 percent of adults say they
are more likely to visit a restaurant that offers
locally produced food items.
From a restaurateur’s perspective, 72 percent
say they have noticed that their guests are more
interested in locally sourced items now compared
to two years ago. Tableservice operators are
noticing a stronger interest in local sourcing
among their guests than quickservice operators.
To satisfy this consumer demand, many
restaurants offer locally sourced items, including
onsite gardens. While much more common in fine
dining than in any other segment, a substantial
number of other fullservice restaurants follow suit.
64
Percent of adults that
say they are more
likely to visit a restaurant that offers locally
produced items.
Consumers Go Local
Percent of restaurant operators who say
their customers are more interested in locally
sourced items than they were two years ago
91%
73%
72%
70%
50%
Family
dining
Casual
dining
Fine
dining
Quickservice
Fast
casual
From Farm to Restaurant Kitchen
Restaurant operators who offer the following items on their menus
FamilyCasual
dining
dining
Locally sourced produce
Fine
Fast
dining Quickservice casual
51%
63%
93%
28%
50%
Locally sourced meat or seafood 41%
48%
80%
15%
27%
Food items from an on-site
garden
9%
8%
30%N/AN/A
Eco-Fare on the Rise
Restaurant Retail
Sustainability is a long-term trend in the back-of-the-house, where
restaurants have ramped up efforts in energy and water conservation in
their kitchens and offices. This trend also is evident in the dining room,
with consumer interest in environmentally friendly fare growing stronger.
NRA research shows that 58 percent of consumers say they are likely
to make a restaurant choice based on its eco-friendly practices. Fifty-five
percent say they are more likely to pick a restaurant that offers menu
items that were grown or raised in an organic or environmentally
friendly way.
A majority of restaurant operators across all segments say their
guests are increasingly interested in environmentally sustainable menu
items. The trend is strongest in the fine dining and fast casual segments.
Restaurants have been expanding
their retail offerings over the past
several years as a way to grow
business and reach a wider
consumer base. About one-quarter of
restaurants currently offer packaged food
items for retail sale in their operations or grocery stores, and
roughly half say they think such products will become more
popular within their segment in the future.
Getting into the Retail Business
Percent of restaurant operators who offer packaged
food items
62%
Sustainability
Gains Popularity
Percent of restaurant operators who
say their customers
are more interested
in eco-friendly food
than they were two
years ago
52%
73%
Family dining
49%
37%
72%
Casual dining
82%
Fine dining
Quickservice
27%
68%
Fast Casual
43%
29%
22%
20%
11%
Family dining Casual dining Fine dining Quickservice Fast Casual
81%
Currently offer packaged food items for retail sale in the restaurant or a grocery store
Believe packaged food items will become more popular
47
Healthy Choices on the Menu
likely to visit a restaurant with healthy menu
options, as well as to have noticed more such
options over the past two years.
A strong majority of restaurant operators
across all segments (84 percent) say their
customers are paying more attention to
nutrition, spurring them to diversify such
options on their menus. Overall, more than six
Health and nutrition continue to be top of mind
for consumers when dining out. According to
NRA research, more than seven of 10 consumers
say they are more likely to visit a restaurant that
offers healthful options, and more than eight of
10 agree that restaurants offer more healthful
choices now compared to two years ago. Women
are more likely than men to say they are more
of 10 say they have items identified as healthful/
nutritious on their menus, and three-quarters
offer similar options on their children’s menus.
In addition, 59 percent of chefs in the NRA’s
What’s Hot in 2014 survey say they always make
efforts to adjust recipes to be more healthful, and
33 percent say they try to make dishes more
healthful, but that not all recipes are easily adjusted.
Consumer Interest in Nutrition
Healthful Options on Majority of Menus
Percent of restaurant operators who say their customers
pay more attention to the nutritional content of their food
than they did two years ago
Percent of restaurant operators who offer the following on
their menus
88%
82%
87%
81%
78%
75%
66%
63%
63%
73%
64%
54%
82%
82%
Family dining Casual dining
Family dining Casual dining
66%
Fine dining
Quickservice
Fine dining
Quickservice
Fast casual
Menu items identified as nutritious
Kids’ menu items identified as nutritious
Fast casual
Nutrition Makes a Difference
Consumers take notice of healthful menu options
All
Adults
Men Women
18
to 34
35
to 44
45
to 54
55
65 or
to 64Older
More healthy options available compared to two years ago
81%
79%
84%
82%
85%
84%
82%
74%
More likely to visit a restaurant that offers healthy options
72%
67%
76%
73%
71%
76%
67%
69%
Cuisine on Wheels
F
ood trucks continue to be a popular addition to the culinary scene in many
communities. According to NRA research, two of five consumers say they
have purchased items from a food truck, and nearly seven of 10 say they would be
interested in visiting a food truck if their favorite restaurant offered one.
Food truck patronage is more common in the Northeast (49 percent) and
West (48 percent), compared with consumers from the South (35 percent) and
Midwest (34 percent). It is also more common among younger consumers, as is
consumers’ interest in visiting food trucks if their favorite restaurant offered one.
While most food trucks aren’t extensions of brick-and-mortar restaurant
operations, a small percentage of restaurant operators currently operate a
truck as part of their business. In addition, NRA research found that up to
one-fifth will consider starting one in the next year or two, with limitedservice operators more likely to say so than fullservice operators. Operators
in different segments also have differing opinions about whether food trucks
will become more popular within their segments in the future.
48
Lunch on the Road
79%
76%
71%
67%
59%
40%
48%
49%
45%
41%
33%
22%
All adults
Age 18-34 Age 35-44 Age 45-54 Age 55-64
Age 65+
Would patronize a food truck if their favorite restaurant offered it
Have purchased food from a truck
National Household Survey, 2013
49% of quickservice operators
say they believe food trucks will
become more popular within
their segment in the future.
METHODOLOGY
Sales Data
The National Restaurant Association’s 2014 Restaurant Industry
Forecast report projects nominal and real growth rates for all
sectors of the restaurant industry. Real growth is calculated
separately for each market segment.
To calculate real sales growth at eating-and-drinking places,
the projected increase in menu prices (including projected price
increases for alcoholic beverages served) is subtracted from the
percent increase in sales.
For other industry sectors where food costs are the biggest
determinant of expenses — such as colleges and universities — a
modification of the Producer Price Index (PPI) for food (which
measures changes in wholesale food prices) is used to calculate
the sector’s real growth.
Modifications to the PPI for food are based on historical
patterns for each industry sector. The food-cost component
constitutes the base percent increase, which is adjusted to
reflect population changes and other pertinent factors, such as
labor and overhead costs.
To arrive at 2014 real sales figures for the total restaurant
industry, as well as for the Commercial and Noncommercial
Restaurant Services groups, revised 2013 sales were multiplied
by the respective 2013 real growth factors. The real sales figures
for each of the industry sectors were added and compared with
2013 sales to obtain real growth for the industry overall and the
industry’s two major segments.
The restaurant sales projections in this report were prepared
in consultation with the research firm Malcolm M. Knapp Inc.
Forecast Updates
The National Restaurant Association’s projections for 2014
industry sales are based on the best data available in December
2013. If the outlook for general conditions or the food situation
changes significantly in 2014, those projections will require
adjustment. The latest developments are posted at Restaurant.org/
Research. In addition, the performance of individual companies
or sales in local market areas may differ substantially from the
U.S. outlook.
Sales Data for Previous Years
Getting final estimates for restaurant-industry sales in previous
years is an ongoing process. The National Restaurant Association’s Restaurant TrendMapper offers updated sales estimates as
they become available. Subscribe at Restaurant.org/Trendmapper.
State and Regional Forecast
State restaurant-sales data is arranged according to the nine
U.S. Census Bureau regions. Included for each state are revised
restaurant-sales data for 2013, projected 2014 restaurant-sales
figures and percent-change calculations for population,
employment and disposable personal income.
Much of the historical economic data in this report are based
on information obtained from such sources as the Bureau of
Economic Analysis, which is part of the U.S. Department of
Commerce, and the Bureau of Labor Statistics, which is part of
the U.S. Department of Labor.
A Few Reminders
•Adjustments were made to arrive at a predetermined U.S.
total.
• Sales figures for each state are subject to a larger margin of
error than the national projections.
•Actual sales figures represent an overall allocation of total
sales in the United States. Although percent changes are
subject to more variation, they have been shown here as a
convenience to readers.
• “Restaurant sales” includes sales in foodservice operations
with payrolls that fall under the North American Industry
Classification System definition of Food Services and Drinking
Places (NAICS Code 722). Sales totals also cover managed
services (contract foodservice).
Surveys
Restaurant Trends Survey: The National Restaurant Association conducted an online survey of 520 restaurant operators nationwide across industry segments in November-December 2013, asking a range of questions about their business and operating
environment.
National Household Survey: The National Restaurant Association commissioned ORC International to conduct a telephone survey
of 1,019 American adults December 5-8, 2013, asking a variety of questions about consumers’ interaction with restaurants.
Technology Innovations Consumer Survey: The National Restaurant Association commissioned ORC International to survey
1,000 adults October 3-6, 2013, specifically about their usage of technology options in restaurants.
The Smartest Business Decisions
are Based on the Best Information
The NRA’s research and publications can help restaurant operators build customer loyalty, rewarding careers and
financial success. And don’t forget, NRA membership includes member-exclusive pricing on all publications!
Visit Restaurant.org/Research for more information.
– 2014 Edition
REPORT 2013
OPERATIONS
RESTAURANT
Restaurant Industry 2020:
A Snapshot of the Future
A futuristic study of restaurant industry
trends, offering a window to future
operating trends and conditions. Explores
the evolution of consumer, workforce, and
operating trends to help restaurant
operators plan strategically for the future.
PDF instant download.
Order at Restaurant.org/Store
Free Online
The Uniform System of
Accounts for Restaurants,
8th Edition
A tool for single-unit and small multi-unit
operators to manage ongoing operations
and maximize the usefulness of their
financial information.
Print publication.
Report
ion
2013 – 2014 edit
• Deloitte
ant Association
National Restaur
Knowledge Center
Research and
NW
2055 L Street,
Suite 700
DC 20036
Washington,
1-5900
202-33
Phone:
restaurant.org
Email: askus@
OPERATIONS
ant Association
National Restaur
h
nt industry researc
More restaura
e at
tools availabl
and business
/Research.
Restaurant.org
RESTAURANT
Restaurant Operations
Report, 2013-2014 Edition
A tool for restaurateurs to see how their
business compares with those of a similar
profile. The report helps operators
sharpen financial performances by
detecting potential problems, determining
how to cut costs, and becoming more
efficient.
Print publication.
Restaurant Performance Index
Released on the last business day of each month, the RPI reports on the health of and outlook for
the restaurant industry.
Restaurant.org/RPI
Free Online
Economist’s Notebook
Regular commentary from the NRA’s chief economist that translates statistics into trends.
Restaurant.org/EconomistsNotebook

Restaurant Industry - National Restaurant Association

Transcription

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