In an early assessment of what restaurants can expect for 2014, Technomic is forecasting a slight uptick in sales for limited-service outlets and bars, but no change for the nation’s full-service establishments.
Overall, the research and consulting company predicted Wednesday that commercial foodservice establishments will split a 4.5 percent increase in sales, the equivalent of a 1 percent increase in inflation-adjusted or real terms. The forecast assumes that menu prices will rise by about 3 percent, the same increase that Technomic projects for 2013.
It described next year’s expected sales improvement as “good, but not as good as 2012,” which Technomic portrayed in hindsight as a very positive year in for restaurants. But even with the gains projected or forecast for 2012 through 2014, “we’re still a long way from getting back to where the industry was” pre-Great Recession, commented Technomic president Ron Paul.
As presenters stressed repeatedly during the firm’s Restaurants 2013 Trends & Directions conference, the fast-casual sector is still outshining the rest of the business in sales growth. It pegged 2012 growth for that splinter of the quick-service restaurant market at 13.2 percent, compared with 4.6 percent for traditional QSRs and 3.6 percent for casual dining.
With the contribution of fast-casual, limited-service restaurants as a whole will split a 4 percent nominal and 1.5 percent real sales increase in 2014, according to Technomic, which project the 2013 rates at 4 percent and 1 percent, respectively.
It foresees no change for full-service restaurants, and an uptick of roughly half a percentage point for bars and taverns.
Longer term, the research company sees restaurants benefiting from several macro-trends, including the maturation and growth in spending power of the so-called Millennial Generation. Melissa Wilson, a principal of Technomic, noted that Millennials already turn to restaurants for 39 percent of their meals, compared with a 34 percent usage rate for Gen X-ers and a 25 percent incidence for Baby Boomers.
Paul also noted that food inflation has slowed.
Indeed, said economist Arjun Chakravarti from the IIT Stuart School of Business, “Inflation is actually under control, but maybe a little lower than we’d like it to be.”