Restaurant Industry Outlook
National Restaurant Association Announces Operator Innovations Awards Finalists
May 8, 2012
An independent panel of judges has selected the finalists for the National Restaurant Association’s inaugural Operator Innovations Awards. Three finalists in each of five categories – Sustainability, Technology, Food Safety, Health & Nutrition, and Menu Development– will be brought to Chicago for the Association’s 2012 Restaurant, Hotel-Motel Show this May. The winners in each category, plus an Innovator of the Year selected from all finalists, will be announced live during Destination: Celebration on Saturday, May 5.
“The Operator Innovations Awards is designed to celebrate and encourage continued advancement in the restaurant industry, while shining a spotlight on industry-leading innovators who inspire other restaurant operators to new heights,” said Jack Crawford, Convention Chair for NRA Show 2012 and President and CEO of Ground Round Independent Owners Cooperative, LLC. “This first year’s operator finalists are driving innovation and excellence in execution, fueling customer satisfaction and profitability.”
The 2012 Operator Innovations Awards finalists are:
Sustainability
Evelyn Hill, Inc. (Liberty Island) – Five million visitors and close to zero waste. While serving five million visitors to the Statue of Liberty and Ellis Island, its operator, Evelyn Hill, Inc., has applied continuous innovations since 2000 that reduce waste and conserve water and energy. 94% of waste is now recycled or composted, and their new 7,000square foot pavilion is LEED Platinum certified.
Starbucks Coffee – Create end-markets for selected foodservice packaging. Starbucks is using its scale and brand presence to drive wholesale industry changes that benefit all restaurant and retail operators. Recycling of single-serve coated cups was extremely limited until Starbucks engaged all components of the value chain to begin making recycling practical and profitable. The company’s goal is that all of its cups, and all of the foodservice industry’s polycoated paper cups, will be recyclable by 2015.
Uncommon Ground – Organic rooftop farming in an urban setting. Uncommon Ground installed the country’s first certified organic rooftop farm at its Edgewater location in 2008 and is preparing to add a second to the Wrigleyville location, where a sidewalk farm is already growing. Both four-star certified green restaurants offer urban agriculture internships focused on farming, beekeeping and sustainable food systems.
Technology
HMS Host (Airport Terminals) – Meal delivery at the departure gate. Travelers at airport terminals can now order and pay for meals from select locations using airport restaurateur HMSHost’s free mobile app, B4 YOU BOARD. Meals—everything from appetizers to entrees—are delivered directly to passengers within 20 minutes of departure. B4 YOU Board is currently available in the following airports: JFK,O’Hare, Minneapolis/St.Paul, and expanding soon to Sacramento, Phoenix and Los Angeles..
SMART Restaurant Group (Which Wich) – On-demand, real-time training. To address training/operational needs determined through guest surveys, SMART Restaurant Group has created an integrated technology solution featuring training videos that can be accessed thru QR codes at appropriate workstations for employees and managers in their Which Wich locations. Smart phones are used to connect through the QR codes and offer 30-60 second “refresher” videos to improve performance.
Stacked Restaurants, LLC (California Casual) – Facilitating “build-your-own” ordering. Stacked Restaurants is a new, full-service concept which utilizes an iPad-based ordering system, enabling guests to control when they order and when they pay, and to customize their meal in a comfortable, uninhibited way. Guests can choose from hundreds of ingredients in customizing their burgers, pizzas, salads and mac ‘n’ cheese, as they place and pay for orders via tabletop iPads.
Food Safety
Colorado Springs School District 11 – Comprehensive management of food ingredients including allergens. This public-school system adapted and implemented the “Allerschool” system, designed to identify individual food ingredients, including all types of allergens in school menu items. This system reduces the likelihood of allergen exposure by minimizing manual ingredient checking, and it increases student safety and ingredient transparency among parents, administrators, students and the kitchen staff.
Sodexo North America – Food safety system that meets strict ISO standards. Sodexo is dedicated to ensuring safe, high quality products and services for all the people they serve. This onsite management firm achieved an industry milestone by obtaining ISO 22000:2005 Food Safety Management System certification for its operations in the US and Canada. This ISO standard requires proof of an organizations ability to plan, implement, operate, maintain and update a food safety management system aimed at providing food that is safe for the consumer.
Waffle House – A public-private partnership to secure foodservice safety post-disasters.
This restaurant chain, in partnership with state health departments, developed a comprehensive business continuity plan featuring tight food safety protocols to ensure speedy and safe reopening after natural disasters. In addition, Waffle House works closely with FEMA and state emergency management agencies as an active Private Sector Partner when responding to natural disasters.
Health and Nutrition
Chartwells Higher Education Dining Services – Making healthier eating cool on campus. “Balance U” is Chartwells’ nationwide program developed to educate and encourage students to eat healthier. Not only does Balance U include made without gluten recipes, menus and labeling, but the program also includes a strong education component for students and employees alike, featuring nutritional labeling information, events and classes, and more.
Sodexo School Services (Did You Know Café) – Cafeteria-as-classroom encourages healthier eating. Targeting the finicky tween demographic, Sodexo transforms dining areas into extensions of the classroom to educate students on healthier eating with the goal of instilling lifelong healthy eating habits.
UCSF Medical Center – Clear and comprehensive communication around healthy options. This academic medical center takes an integrated approach to incorporating nutrition information, education and marketing in its restaurant settings. UCSF offers complete nutrition info in multiple ways including on digital menu boards and the customer’s receipt.
Menu Development
Sodexo School Services (Future Chefs) – Culinary competition engages students across the country. The annual Future Chefs National Competition challenges students to create and prepare healthy recipes in local competitions. 12 recipes per year are chosen to be featured on school lunch menus around the country, and this “For Kids, By Kids” approach has proven to be a great way to increase participation and get kids to try new things.
The Cheesecake Factory, Inc. – Stylized Small-Plates Menu. One of the early innovators in the space of smaller portions, Cheesecake Factory took the creative lead to develop a whole new array of stylized culinary creations that counter balanced the large portions for which it is well known. Premium plates are available in a range of prices and featured distinctly in menus.
UNC Healthcare (Chapel Hill) – Restaurant- Retail Foods Delivered to Patients. UNC Healthcare’s unique approach to foodservice is centered around 13 self branded dining concepts “restaurants” modeled after popular commercial restaurants. Each day, UNC’s 800 patients can order from a 20 page menu with greater than 80 entrée selections and have the restaurant choices delivered to their room. Patients experience greater variety at a lower labor cost than that of traditional hospital food service.
Held at Chicago’s Harris Theater Rooftop Terrace in Millennium Park, Destination: Celebration is this year’s must-attend NRA Show after-party. In addition to celebrities and industry thought leaders, guests will be treated to music by accomplished solo artist Kenny Loggins. Destination: Celebration will be held on Saturday, May 5, 7 p.m. to 10 p.m. Tickets can be purchased online for $125 each, or packs of ten tickets for $1,000. Space is limited, and tickets are sold on a first-come, first-served basis.
The judges’ panel for the Operator Innovations Awards represents the major segments of the foodservice industry. All nominations are reviewed by the panel of industry leaders consisting of Patricia Bando (Associate Vice President, Auxiliary Services, Boston College), Scott Barton (President, Fine Dining Division, Lettuce Entertain You), Jeff Broadhurst (President & CEO, Eat’n Park Hospitality Group), Marc Buehler (President, O’Charleys), Jean-Marie Clement (Director, Global Food & Beverage Line of Business, Walt Disney Parks and Resorts Worldwide), Douglas Davis (Director, Global Food Safety, Marriott International), Chris Demery (Vice President, Applications, OSI Restaurant Partners, LLC), James Houser (Vice President of Administration, Delaware North), John Metz, Jr. (Executive Chef, President and Co-Founder, Sterling Hospitality),Christopher Pappas (CEO, Pappas Restaurants, Inc.), C.W. Craig Reed (Director of Food & Beverage, Broadmoor Hotel), and Ron Serluco (Senior Vice President of Operators, Guckenheimer).
——————————————————————————————————————————————————–
Fewer Visits to Upscale Restaurants and Consumers’ Reluctance to Spend Limits Beverage Alcohol Consumption Growth, Reports NPD
March 7th, 2012
—Atmosphere, food, location, and price key motivators for choosing place that serves alcohol With consumer demand for upscale dining remaining weak and restaurant consumers managing their check when they do visit, beverage alcohol consumption has softened at casual and fine dining restaurants, according to The NPD Group, a leading market research company. Thirty-six percent of consumers ordered alcohol away-from-home in the last three months based on findings from NPD’s recently released Beverage Alcohol Report (BAR), which profiles habits, attitudes, and brand preferences for on-premise beverage alcohol consumption. The majority of upscale restaurant consumers order non-alcoholic beverages and an increasing amount of free tap water.
Visits to upscale restaurants declined by -2 percent but beverage alcohol servings at casual and fine dining restaurants are down only by -1 percent for year ending November 2011 compared to same period year ago, reports NPD. Most of the beverage alcohol servings losses came from younger consumers, ages 21 to 34, while those 35 and older increased their orders of alcoholic beverages.
Key motivations for visiting a place that serves alcohol are atmosphere, food, convenient location, and price, according to NPD’s Beverage Alcohol Report (BAR): Understanding What Motivates On-Premise Beverage Alcohol Choices. Other reasons for choosing a place that serves beverage alcohol include serving alcohol that is a good value; place suits customer’s personality; attentive staff; and stocking the preferred brand of alcohol, according to the NPD report, which profiles habits, attitudes, and brand preferences for on-premise beverage alcohol consumption.
“Beverage alcohol remains an important factor in the upscale restaurant dining experience,” says Warren Solochek, vice president, foodservice at NPD, who will cover highlights from the BAR study at the VIBE conference in Las Vegas on March 14. “Upscale restaurant operators just need to keep in mind that their beverage alcohol consumers want to manage their spending and pay reasonable prices.”
——————————————————————————————————-
U.S. Independent Restaurants Account for 87 Percent of Industry Traffic Losses Since 2008
February 27, 2012 —Chicago: U.S. restaurant industry visits declined from 62.7 billion in 2008 to 60.6 billion in 2011 and independent restaurants accounted for 87 percent (2 billion) of these traffic losses, according to The NPD Group, a leading market research company. Independent restaurants, 7,000 of which have closed since 2009, have steadily lost traffic share to the major restaurant chains, whose unit growth has only offset half of independent unit losses, according to NPD’s ongoing foodservice market research.
Independent restaurants represented 28 percent of industry traffic in the year ending November 2008, and now represent 27 percent of the industry’s visits. Restaurant chains have held a steady share of industry visits since 2009, and gained the independent restaurants’ one percent share loss, increasing share from 60 percent in 2008 to 61 percent in 2011, according to NPD’s CREST® service, which continually tracks consumer use of foodservice.
Based on NPD’s ReCount®, a bi-annual count of U.S. restaurants, chains have grown by 4511 units and the number of independent restaurants decreased by 7,158 units since 2008. The recently released Fall 2011 ReCount reports that independent units were down by two percent from the Fall 2010 ReCount census and chain restaurant unit growth was flat.
Total restaurant industry traffic for the year ending November 2011 was flat compared to a year ago, according to NPD’s CREST. Visits to chain restaurants were up +1 percent while visits to independent restaurants were down -4 percent for year ending November 2011.
“Independent restaurant operators have neither the money nor resources that the chains have,” says Bonnie Riggs, NPD restaurant industry analyst. “They lacked the marketing power to drive traffic and the monetary buffer to get through the difficult times during the past several years.”
————————————————————————————
Restaurant Visits Across the Globe Generally Weak in Third Quarter, Reports NPD
─Canada, China, France, and Italy Post Traffic Gains
Chicago, January 4, 2012 ─ Low consumer confidence and the stressed global economy were reflected in the weak foodservice traffic in most countries around the world in the quarter ending September 2011, according to The NPD Group, a leading market research company. The growing or more stable domestic economies of Canada, China, and France encouraged more visits over last year, in contrast, Italy, with one of the more challenging economic environments, also experienced traffic gains in the quarter. According to NPD’s CREST®, which tracks commercial foodservice usage in Australia, Canada, China, France, Germany, Italy, Japan, Spain, United Kingdom, and the United States, restaurant traffic declines were steepest in Spain, due to persistent economic weakness, and Japan, which is still feeling the after effects of this year’s earthquake. Australia experienced traffic declines in the quarter in spite of a growing economy. China posted traffic gains of 19 percent over the same quarter last year.
“Although foodservice traffic in China experienced double-digit growth over last year, the country’s consumer confidence is not as strong as last year,” said Christina Ma, director, China foodservice. “Chinese consumers have become more careful about spending their money on foodservice visiting, and are increasingly selecting inexpensive foodservice channels, such as bakery/coffee shop and retail, and ordering less food and beverage items.”
According to NPD, foodservice chains continue to grow around the world and visits to independent foodservice concepts have stabilized and returned to growth in some countries. Lunch traffic appears to be growing in some of the stronger economies while breakfast, which is largely a non-core daypart outside of Italy and China, is growing in most markets. Visits during the supper daypart are also growing in most countries. Promotions are still important in attracting consumers to visit foodservice outlets.
“There still is a mixed bag of health and weakness across the global foodservice industry,” says Bob O’Brien, senior vice president of global foodservice at NPD. “While a few of the countries we track posted traffic gains, the news for the third quarter of this year remains disappointing.”
NPD CREST will pilot a foodservice usage tracking program in Mexico the first calendar quarter of 2012 and will issue a report mid-year.
———————————————————
1/08/2012 – Restaurant Industry Outlook Improved in November as Restaurant Performance Index Rose to Five-Month High
Driven by positive same-store sales and an increasingly optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to its highest level in five months. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.6 in November, up 0.6 percent from October. In addition, November represented the second time in the last three months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.
“The November increase in the Restaurant Performance Index was fueled by broad-based gains in both the current situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported their strongest net positive same-store sales results in more than four years, while customer traffic levels also grew in November.”
“Among the forward-looking indicators, restaurant operators’ outlook for both sales growth and the overall economy rose to their highest levels in seven months,” Riehle added.
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.2 in November – up 0.8 percent from October’s level of 99.5. November marked the second time in the last three months that the Current Situation Index stood above 100, which signifies expansion in the current situation indicators.
Restaurant operators reported positive same-store sales for the sixth consecutive month inNovember. Fifty percent of restaurant operators reported a same-store sales gain betweenNovember 2010 and November 2011, while just 28 percent reported a same-store sales decline. This marked the strongest net positive sales performance since August 2007, when 54 percent of operators reported a sales gain and 29 percent reported lower sales.
Restaurant operators also reported stronger customer traffic levels in November. Forty-onepercent of restaurant operators reported higher customer traffic levels between November 2010 and November 2011, while 32 percent of operators reported a traffic decline. In October, 37percent of operators reported higher customer traffic, while 39 percent reported a traffic decline.
Capital spending activity among restaurant operators trended upward in recent months. Forty-sixpercent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the highest level in five months.
12/06/2011 – The U.S. restaurant industry entered 2011 hopeful after ending 2010 with two consecutive quarters of one percent traffic increases, but the continuing economic saga of high unemployment and low consumer confidence kept visits to restaurants flat in the first three calendar quarters of the year, according to The NPD Group, a leading market research company.
Restaurant traffic was just above the line at +0.2 percent in the quarter ending March and just below the line at -0.4 percent for both the second and third calendar quarters, according to NPD’s CREST® service, which continually tracks consumer use of U.S. restaurants. Quick service restaurants (QSR)/fast food, which represent 78 percent of industry visits, held up the industry with a one percent gain in the first quarter ending March, and visits flat in each the second and third quarters. Visits to casual dining restaurants, which represent 11 percent of industry traffic, declined two percent in both the first and second quarters of 2010 and by one percent in the third quarter. Midscale/family style restaurants, which represent 10 percent of industry visits, saw traffic decline by two percent in the first quarter and down by four percent in the quarter ending September.
10/11/2011 – Dampened by softer sales and traffic levels and continued uncertainty among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) declined for the second consecutive month in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.4 in August, down 0.3 percent from July.
In addition, August marked the second consecutive month that the RPI stood below 100, the level above which signifies expansion in the index of key industry indicators.The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.3 in August – down 0.5 percent from July and the second consecutive monthly decline.
Although restaurant operators reported net positive same-store sales in August, the overall results were softer than recent months. Forty-five percent of restaurant operators reported a same-store sales gain between August 2010 and August 2011, while 37 percent of operators reported lower same-store sales. In July, 48 percent of operators reported higher same-store sales, while 34 percent reported a sales decline.
08/22/2011 – Driven by stronger same-store sales and traffic levels and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose above 100 in June. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.6 in June, up 0.8 percent from May’s level of 99.9. In addition, June represented the sixth time in the last seven months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.5 in June – up a solid 1.4 percent from May’s level of 99.2. The Current Situation Index stood above 100 in three of the last four months, which signifies expansion in the current situation indicators.
Restaurant operators reported stronger same-store sales results in June. Fifty-one percent of restaurant operators reported a same-store sales gain between June 2010 and June 2011, up from 39 percent of operators who reported higher same-store sales in May. Meanwhile, 31 percent of operators reported a same-store sales decline in June, down from 40 percent of operators who reported lower sales in May.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 100.7 in June – up slightly from May’s level of 100.6. June represented the 11th consecutive month above 100 for the Expectations Index, and the modest improvement came on the heels of three consecutive monthly declines.
Via National Restaurant Association
03/25/11 – Although visits to U.S. restaurants are still below the level registered six years ago, there were signs of improvement in the second half of 2010, according to The NPD Group, a leading market research company. NPD’s foodservice market research reports restaurant traffic was flat for the quarter ending December 2010, compared to a -3 percent decline for same quarter year ago. Visits to quick service restaurants increased in the second half of 2010.
Another sign that the foodservice industry is improving is that non-deal visits stopped declining, according to NPD’s CREST®, which continually tracks consumer usage of commercial and non-commercial foodservice outlets. Consumer spending at restaurants has also started to come back. Spending rose in the last three quarters of 2010, which yielded an increase in spending for 2010. The gain brings the industry nearly back to the dollar level registered in 2008.
“I believe that the improvements we’re experiencing in the industry are a result of pent up demand,” says Bonnie Riggs, restaurant industry analyst at NPD. “Consumers are tired of pinching pennies and Recession-weary and going to a restaurant is an affordable way to get out and have fun.”
According to NPD’s CREST OnSite®, which tracks usage of foodservice at business and industry, secondary schools, colleges and universities, hospitals, lodging, recreation, senior care, military, and vending segments, total non-commercial traffic declines eased in the fourth quarter compared to year-ago. Most notably, after 14 consecutive quarters of traffic losses, Business & Industry traffic increased +2 percent vs. year-ago.
“We are beginning to see many encouraging signs, however, with unemployment still over 9 percent and consumer confidence low, consumers continue to scrutinize every purchase,” says Riggs. “There’s no question value and promotion will continue to factor heavily in their restaurant selections. It will take a lot of creativity to drive more traffic in the coming year.”
2/3/11 – Restaurant industry sales are expected to reach a record $604 billion and post positive growth in 2011 after a three-year period of negative real sales growth, according to National Restaurant Association research released today. The Association’s 2011 Restaurant Industry Forecast projects an industry sales increase of 3.6 percent over 2010 sales, which equals 1.1 percent in real (inflation-adjusted) terms.
The nation’s 960,000 restaurants will continue to be strong contributors to the recovery of the nation’s economy, with industry sales representing 4 percent of the U.S. gross domestic product and employees comprising nearly 10 percent of the U.S. workforce. Its total economic impact exceeds $1.7 trillion, as every dollar spent in restaurants generates $2.05 spent in the overall economy. Restaurants are the nation’s second-largest private sector employer with 12.8 million employees.
“As the national economy is slowly improving, the restaurant industry is climbing out of its most challenging period in decades to post positive real sales growth in 2011,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. “As in 2010, restaurant industry job growth is expected to outpace the national economy this year, emphasizing the importance of industry to the nation’s economy.”
“The U.S. restaurant industry is an economic juggernaut whose annual sales are larger than 90 percent of the world’s economies – if it were a country, it would rank as the 18th largest economy in the world. While pockets of challenges remain, we are looking forward to a brighter future in 2011,” he added.
Via National Restaurant Association
1/27/11 – The number of U.S. restaurants declined by -1 percent, or a loss of 5,551 restaurants, from a year ago, according to a fall 2010 restaurant census conducted by The NPD Group, a leading market research company. According to NPD’s Fall 2010 ReCount®, which is a census of commercial restaurant locations in the United States compiled in the spring and fall each year, independent restaurant units dropped by -2 percent compared to a year ago, and chain counts were flat
Based on NPD’s Fall 2010 ReCount, which includes restaurants reported to be open as of September 30, 2010, the number of quick service restaurants, declined by -1 percent or 2,122 units. Full service restaurant units, which includes the casual dining, mid-scale, and fine dining segments also experienced a unit loss of -1 percent or 3,429 units.
“These past two years have been particularly tough for independents, which don’t have the resources to compete with the chains,” says Greg Starzynski, director, product development-foodservice at NPD. “Over the past few years we’ve lost several thousand independent restaurants.”
1/24/11 – As food companies and restaurant operators make gallant attempts to keep from raising prices as a result of rising commodity and transportation costs, U.S. consumers are bracing to pay more for their food in 2011. According to food market research by The NPD Group, which has tracked all aspects of consumer eating behaviors in- and away-from-home for three decades, historically consumers have never let food costs rise faster than their incomes and have managed their food spending accordingly, whether choosing to eat at home or away from home.
“With food inflation accelerating in the last months of 2010 and government forecasts show it continuing into at least the first half of 2011, Americans will be making well-thought out choices this year on how they will feed themselves,” says Harry Balzer, chief industry analyst at NPD and author of Eating Patterns in America. “It amounts to ‘relative food inflation.’ They have so much to spend on food and they will carefully pick-and-choose how they spend it. Looking for more coupons and discounts, buying more private label foods, eating more leftovers, and generally getting the most bang for their buck.”
According to NPD’s in-home research, National Eating Trends®, and foodservice market research, CREST®, 72 percent of meals are prepared in homes, 18 percent are obtained from foodservice outlets, 8 percent are skipped and 2% are from unknown sources. Over the past two years U.S. consumers pulled back on their use of restaurants, and the industry lost 2.4 billion visits from year ending November 2008 thru November 2010, from 61.5 billion visits to 59.1 billion visits. Food deflation during this period gave supermarkets the edge in terms of consumer food spending. As the economy has begun to improve, Americans have started adding more restaurant visits back into their routines, but high unemployment continues to hamper the industry’s growth.
Via The NPD Group
1/6/11 – As a result of a downtick in same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) fell below 100 in November. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in November, down 0.8 percent from October. November marked the first time in three months that the RPI stood below 100, the level above which signifies expansion in the index of key industry indicators.
“While the RPI’s November decline was largely the result of softer same-store sales and traffic performances, it doesn’t necessarily mean the industry’s recovery is in peril,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Like the economy as a whole, the restaurant industry’s road to recovery will be one with occasional bumps along the way.”
“Overall, the economic fundamentals of the restaurant industry remain positive, which will likely lead to stronger sales results in the months ahead,” Riehle added.
Via National Restaurant Association
1/4/2011 – From the enthusiasm for the strong Chinese recovery to the persistent economic concerns in Spain, the state of global foodservice in the third calendar quarter of 2010 was a reflection of each country’s economic state, according to foodservice market research by The NPD Group, a leading market research company. Visits to foodservice outlets in China, where the economy is prospering, increased by double-digits in the third quarter of this year compared to the same quarter last year, whereas foodservice traffic in Spain, which has an unemployment rate of 19.8 percent, declined by -3 percent from a year ago
According to NPD’s CREST®, which tracks commercial foodservice usage in Australia, Canada, China, France, Germany, Italy, Japan, Spain, United Kingdom, and the United States, restaurant traffic counts declined in most of the countries, with the exceptions of Australia and China. Average eater checks are up in all countries except Japan and in many countries the boost in checks is enough to overcome all or most of the continuing declines in traffic counts.
Via The NPD Group
12/14/10 – With continued high unemployment across the U.S., restaurant traffic remains down, -1 percent in the third calendar quarter of 2010, but positive signs point to restaurant traffic growth in the last calendar quarter of 2010 and in 2011, according to foodservice market research by The NPD Group, a leading market research company. NPD forecasts traffic to grow by +1 percent in the final quarter of 2010 and first quarter of 2011.
According to NPD’s CREST®, which continually tracks consumer usage of commercial and non-commercial foodservice outlets, customer traffic to commercial foodservice matched the year ago level, now about 4 percent below the third quarter (July, August, September) of 2008. Consumer spending at commercial foodservice nearly recovered from losses a year ago (up +2 percent versus a -2 percent decline) registering about the same volume level as the third quarter of 2008.
Visits to quick service restaurants, which represent the largest traffic share in the industry, were up by +1 percent in the third quarter. Casual dining and midscale full service restaurants continued to experience traffic declines. Casual dining visits were down -2 percent and traffic to midscale restaurants was down -3 percent.
“Some of the areas most affected by the recession have stopped declining or are starting to edge back up, like families with kids and non-deal visits,” says Bonnie Riggs, restaurant industry analyst at NPD. “These are positive signs that the industry is beginning to return to normalcy’, but high unemployment and the loss of benefits for the long-term unemployed, will keep the industry from full recovery .”
Unemployment has been highest among young adults, ages 18 to 34, historically the most frequent restaurant users. Since September 2008, the per capita restaurant visits for adults, ages 18 to 24, dropped from 236 to 215, and adults ages 25 to 34, declined from 256 to 235 visits. Consumers over age 50 tend to be lighter restaurant users, but they were more likely to hold onto their jobs during this recession and maintained their foodservice usage.
Unemployment also continues to adversely affect non-commercial foodservice traffic. According to NPD’s CREST OnSite®, which tracks usage of foodservice at business and industry, secondary schools, colleges and universities, hospitals, lodging, recreation, senior care, military, and vending segments, total non-commercial traffic is down -6 percent versus the third quarter in 2009, however, traffic losses have softened. The non-commercial sectors most affected by the economy and high unemployment, such as business and industry, vending, and recreation, posted the steepest declines.
“In spite of the visit declines, U.S. consumers still made 67 billion visits to commercial and non-commercial restaurants over the past year, and the industry will continue to work hard to provide their customers with the best quality, value, and convenience,” says Riggs. “In the end, there will be winners and losers who capitalize on the situation with innovative offerings that draw consumers out of their homes or away from competitors.”
Via The NPD Group, Inc.
12/7/10 – Fueled by improving same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to its highest level in more than three years. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.7 in October, up 0.4 percent from September and strongest level since September 2007. In addition, the RPI stood above 100 for the second consecutive month, which signifies expansion in the index of key industry indicators.
“October’s RPI gain was driven by continued improvements in the same-store sales and customer traffic indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Most notably, a majority of restaurant operators reported higher same-store sales in October, the first such occurrence since August 2007. As a result, the RPI’s Current Situation Index reached the 100 plateau for the first time in more than three years.”
“In addition to improving current situation indicators, restaurant operators are increasingly optimistic about sales growth in the coming months, and also reported a positive outlook for staffing levels for the first time in six months,” Riehle added.
Watch a video of Riehle providing an industry update, including the October RPI and outlook for the holiday season.
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor, and capital expenditures), stood at 100.0 in October – up 0.6 percent from September and its second consecutive solid gain. In addition, the Current Situation Index reached the 100 level for the first time since August 2007, which meant 37 consecutive months below 100 in the contraction range.
Restaurant operators reported a net increase in same-store sales for the second consecutive month in October. Fifty-one percent of restaurant operators reported a same-store sales gain between October 2009 and October 2010, up from 44 percent of operators in September and the first time since August 2007 that a majority of operators reported higher same-store sales. Meanwhile, only 33 percent of operators reported a same-store sales decline in October, down from 38 percent of operators who reported negative sales in September.
Restaurant operators also reported an increase in customer traffic levels in October. Forty-four percent of restaurant operators reported an increase in customer traffic between October 2009 and October 2010, up from 38 percent of operators who reported higher traffic in September. In comparison, 34 percent of operators reported a traffic decline in October, down from 37 percent in September.
While sales and traffic levels improved, capital spending activity remained relatively steady. Forty-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the past three months, matching the proportion of operators who reported similarly last month.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures, and business conditions), stood at 101.4 in October – up 0.3 percent from September and its strongest level in six months.
Restaurant operators remain solidly optimistic about sales growth in the months ahead. Forty-three percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), matching the proportion who reported similarly last month. Meanwhile, just 12 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down slightly from 14 percent who reported similarly last month.
Restaurant operators also remain relatively optimistic about the direction of the overall economy. Thirty-five percent of restaurant operators said they expect economic conditions to improve in six months, down slightly from 38 percent last month. In comparison, only 12 percent of operators said they expect economic conditions to worsen in the next six months, down from 16 percent who reported similarly last month.
Along with a positive outlook for sales and the economy, restaurant operators’ plans for capital expenditures also remained solid. Forty-eight percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 47 percent who reported similarly last month and the strongest level in six months.
For the first time in six months, restaurant operators reported a positive outlook for staffing gains in the months ahead. Sixteen percent of operators expect to increase staffing levels in six months (compared with the same period in the previous year), and just 11 percent plan to reduce staffing levels in six months.
The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor, and capital expenditures.
Via National Restaurant Association
11/11/10 -Restaurant visits from families or parties with kids increased this past summer after three years of traffic declines, according to The NPD Group, a leading market research company. NPD’s foodservice market research reports that visits by parties with kids increased by 1 percent in the quarter ending August 2010 versus the same quarter a year ago.
“Although the visits increase reflect just one quarter, the return of parties with kids is another sign that business is beginning to pick up for the restaurant industry,” said Bonnie Riggs, NPD’s restaurant industry analyst. “Parties with kids are integral to the industry and make a significant contribution in both volume and sales.”
According to NPD, last year, even with visits down, families or parties with kids accounted for 14 billion meals and snacks and $70 billion in sales.
Via The NPD Group, Inc.
11/2/10 -Driven by improving same-store sales and customer traffic levels, as well as growing optimism among restaurant operators, the outlook for the restaurant industry improved in September. The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.3 in September, up a solid 0.8 percent from its August level.In addition, the RPI rose above 100 for the first time in five months, which signifies expansion in the index of key industry indicators.
“The RPI’s solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. “Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI’s Current Situation Index to its highest level in nearly three years.”
“In addition, restaurant operators are more optimistic about sales growth in the months ahead, while their outlook for the economy rose to its strongest level in five months,” Riehle added.
Watch a video of Riehle providing an industry update, including the RPI and holiday dining.
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.4 in September – up 0.5 percent from August and its strongest level since October 2007. However, the Current Situation Index remained below 100 for the 37th consecutive month, as the softness in the labor and capital expenditure indicators outweighed the gains in same-store sales and customer traffic.
Restaurant operators reported a net increase in same-store sales for the first time in six months in September. Forty-four percent of restaurant operators reported a same-store sales gain between September 2009 and September 2010, up from 38 percent of operators who reported higher sales in August. Meanwhile, 38 percent of operators reported a same-store sales decline in September, down from 43 percent of operators who reported negative sales in August.
Restaurant operators also reported a slight uptick in customer traffic levels in September. Thirty-eight percent of restaurant operators reported an increase in customer traffic between September 2009 and September 2010, while 37 percent of operators reported a traffic decline. In August, 35 percent of operators reported an increase in customer traffic levels, while 42 percent reported a traffic decline.
Despite the improvements in sales and traffic levels, restaurant operators reported a slight dropoff in capital spending levels in recent months. Forty-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 44 percent of operators who reported similarly last month.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.1 in September – up 1.0 percent from August and its strongest level in five months.
Restaurant operators are more optimistic about an improving sales environment in the months ahead Forty-three percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), up from 38 percent who reported similarly last month. In comparison, 14 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 17 percent who reported similarly last month.
Restaurant operators are also more bullish about the direction of the overall economy. Thirty-eight percent of restaurant operators said they expect economic conditions to improve in six months, up from 25 percent last month and the strongest level of optimism in five months. In comparison, just 16 percent of operators said they expect economic conditions to worsen in the next six months, down from 21 who reported similarly last month.
Along with an improving outlook for sales and the economy, restaurant operators’ plans for capital expenditures also grew. Forty-seven percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 42 percent who reported similarly last month and the strongest level in five months.
The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor, and capital expenditures. The full report is available online.
Via the National Restaurant Association
9/30/10 – The National Restaurant Association hailed final passage of a bill in the U.S. House of Representatives that will provide the nation’s restaurants and small businesses with tax relief and assistance in gaining access to capital. The House voted 237-187 this afternoon for the Small Business Jobs Act of 2010, H.R. 5297, which passed the Senate last week. President Obama is expected to sign the measure into law next week.
“This bill will help restaurants and small businesses with tax relief and assistance in gaining access to capital that is critical to economic and financial recovery,” said National Restaurant Association Executive Vice President of Policy and Government Affairs Scott DeFife. “Our industry, employing nearly 13 million Americans at 945,000 restaurants locations nationwide, is comprised mainly of small, independent businesses.”
“Households are still holding back on spending, and as a result many restaurant operators are continuing to struggle,” added DeFife. “The provisions in this bill to expand access to capital will help restaurant operators make necessary investments, hire and retain workers, and, in certain cases, keep their doors open. The modernization of popular Small Business Administration loan programs, the inclusion of refinance options, and extension of expiring loan guarantees and borrower fee reductions will go a long way to help small businesses in this difficult credit climate.”
Importantly, for 2010 and 2011 the legislation increases the Section 179 expensing limits to $500,000 and expands Section 179 to allow businesses to expense up to $250,000 of the cost of qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.
“The expensing provisions will encourage restaurants to undertake capital expenditures, and these will have a multiplier effect, spurring economic activity and job growth in communities throughout the country,” said DeFife, noting that the industry is forecast to generate an overall economic impact of $1.5 trillion this year.
The Small Business Jobs Act of 2010 includes the following beneficial provisions:
• Establishment of a $30 billion Small Business Lending Fund to spur and facilitate small banks in lending money to small businesses
• Increase in the size of Small Business Administration (SBA) loans from $2 million to $5 million
• Continued elimination of fees associated with such loans through 2010
• Continues 90 percent government guarantee of such loans through 2010
• Increase in the Section 179 expensing limits and expansion to cover restaurant property
Via The National Restaurant Association
8/26/10- U.S. Restaurant Traffic Will Grow Less Than Population Growth Over Next Decade, Reports NPD
Visits to U.S. restaurants are forecasted to grow less than one percent a year over the next decade, slower than the 1.1 percent a year growth in the country’s population, according to recently released foodservice market research by The NPD Group, a leading market research company. The report, A Look into the Future of Foodservice, forecasts that annual visits to restaurants will increase by 8 percent over the next ten years.
The report, which provides forecasts of restaurant segments, categories, visit situations, and beverage and food products based on the aging of the U.S. population, population growth, and recent trends, finds that the aging of the U.S. population over the next decade will not benefit the restaurant industry.
“The aging effect on the restaurant industry will be slightly negative because of aging Baby Boomers,” says Bonnie Riggs, NPD’s restaurant industry analyst and author of A Look into the Future of Foodservice. “A greater share of visits will source to those 50 years and older in 2019, but as consumers age they become less frequent restaurant users. This means the restaurant industry will have heavier dependence on lighter buyers.”
Trend momentum, which captures behavioral momentum based on the past nine years and includes such factors as new menu items, promotions, and restaurant openings and closings, has not been working in the industry’s favor.
“In addition to being hit hard by the recession, Americans are eating more suppers at home, and fewer women entering the workforce have negatively impacted restaurant industry traffic,” says Riggs. “The current trend momentum may not appear favorable for the industry moving forward, but it’s the area where the industry has the greatest opportunity to change the direction of the forecast. There isn’t much that can be done about the aging of the population and population growth.”
She points out that the growth at the breakfast and PM Snack dayparts are examples of trends that present opportunities for the foodservice industry.
“Forecasts are something to be worked against, but are not cast in stone,” says Riggs. “They are used to assess potential opportunities and risks for the purpose of long-term planning. The future course can be altered.”
Via The NPD Group
8/3/10- Restaurant Performance Index (RPI) declined again in June, making it the third month in a row.
As a result of a dampened outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) declined for the third consecutive month in June. The RPI– a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.5 in June, down 0.3 percent from May and the lowest index level since February. In addition, the RPI stood below 100 for the second consecutive month, which signifies contraction in the index of key industry indicators.
“Although the current situation indicators registered a modest improvement in June, each of the four expectations indicators dipped for the second consecutive month,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators are generally optimistic that sales and business conditions will improve in the next six months, but the strength of their optimism fell to a five-month low.”
via the National Restaurant Association
6/10/09 – The National Restaurant Association’s comprehensive index of restaurant activity registered its fourth consecutive monthly gain again in April standing at 98.6, up 0.8 from March. The RPI (Restaurant Performance Index) is measured by the responses to the NRA’s Restaurant Industry Tracking Survey which focuses on sales, traffic, labor, and capital expenditures. Over 37 percent of restaurant operators are growing more optimistic regarding issues of the economy and are expecting a positive increase in sales growth within the next 6 months. Along with the expectations of increased sales, many operators are planning for capital expenditures with forty-six percent preparing for expansion or remodeling and for equipment. For a more detailed outline of the RPI, please visit www.restaurant.org.
