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Research chief Riehle talks about industry, economy

Hudson Riehle, the National Restaurant Association’s senior vice president of research and knowledge, will share the latest industry data and analysis at his session, “Key Trends Shaping the Future of Foodservice”, May 19 at 2 p.m., in the North Hall’s Learning Center, Booth 7400. Adam Hasley, the Association’s research director, will join Riehle, and the two will offer insight on how national and local economies impact sales. In this Q&A, Riehle offers a preview of what to expect:

What is the state of the restaurant industry today?

The industry is continuing to post moderate growth, and we expect that sales will reach another record high, exceeding $825 billion, despite some challenges. There is still pent-up demand for dining out among consumers. Our research finds that 90 percent of Americans enjoy going out to eat at restaurants. However, income issues do restrict their ability to patronize restaurants as often as they would like.

Who is dining out and where?

Ultimately, income and employment are related, so, in general, the areas of the country posting the highest restaurant sales growth are the ones that have the highest employment growth, income growth and population growth. Where are they dining? Tableservice, which last year posted sales of $263 billion, and quickservice, which includes fast-casual restaurants, reported sales of $234 billion in 2017. Consumers also are interested in visiting restaurants in the snack and nonalcoholic beverage segment.

How important is takeout and delivery to the restaurant business?

The off-premises market—takeout, delivery, drive-thru, curbside and food trucks—has been an important driver of sales over the past decade and is only growing more important. The most rapidly developing component is delivery, particularly in quickservice. Looking at all industry traffic, delivery makes up 3 percent of traffic, but it indicates large upside potential to drive sales growth in certain segments, just as drive-thrus did back in the ’70s and ’80s. From the consumer perspective, there’s nothing more convenient than having a restaurant come to them.

What are the biggest challenges to the industry today?

Labor cost and recruitment. Looking at hourly, nonsupervisory, eating-and-drinking-place wages in the past three years, wage growth in our industry is substantially higher than private-sector wages. The reasons for this are the number of state minimum-wage increases implemented as well as a much shallower national labor pool to draw from. When you ask restaurateurs, one out of two will tell you that managing the labor component to ensure profit margins is their biggest challenge and critical to long-term success.

What should we expect when we meet for the 2019 Restaurant Show?

We’ll still be talking about labor, and there will be even greater focus on the off-premises markets, especially delivery. That will include alcohol, not just food. We also expect there to be greater emphasis on ecofriendly operations, sourcing, technology, children’s meals, and global flavors.

This post is sponsored by The National Restaurant Association®

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