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Cautious consumers point to modest growth in ’14 and ’15, Technomic says

In the first peek at what restaurants can expect on their top line in 2015, Technomic forecast a continuation of the sluggish sales growth the industry has seen in 2014, with the exception of fast casual.

According to its industry growth forecast, delivered this week in Chicago, the research company expects to see a 3 percent increase in sales both this year and next at commercial foodservice operations, which actually translates to a slight decrease of .4 percent in real or inflation adjusted terms. That’s lower than the forecast for other foodservice operations, including hotels, colleges and K-12 schools, which are expected to see 3.9 percent sales growth or 1.1 percent in real terms.

Technomic cites caution on the part of consumers plus concerns about the weather as weighing on sales forecasts. For 2014, 65 percent of consumers said harsh weather had a negative effect on their ability to go out to eat; 53 percent said they went out less to sit-down restaurants and 33 percent even curbed trips to fast-food restaurants for takeout. The good news, though, is that more than half (51 percent) said they anticipated dining out more often when conditions turn favorable.

While sales growth is still positive, says Joe Pawlak, the Technomic senior vice president who delivered the report, it’s hardly robust. 

Looking at the restaurant landscape, Technomic noted that it’s the higher-end concepts in limited-service—and in full-service—that are performing best. Fast casual (which Technomic defines as having check averages over $9 among other factors) had one-year growth of 11 percent in 2013 and polished casual had 4 percent growth. Even fine dining is doing fantastic, Pawlak said, showing 6 to 7 percent growth. That compares with just 2.8 percent growth in quick service in 2013 and 2 percent growth in casual dining.

Among full service chains, steak chains are way out front with 6.2 percent growth compared to the category overall; the next best segment is varied menu at 2.5 percent. When it comes to full-service unit growth, Asian chains and steak chains top the list.

Among limited service chains, Asian/noodle chains showed 10.3 percent growth, well above the 3.9 percent average for limited-service restaurants overall, and Asian chains topped limited service unit growth as well.

Looking forward, Techomic reports no real change in inflation-adjusted LSR sales and slight declines of 1 percent in real growth for both full-service restaurants and bars and taverns.

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