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Limited-service restaurant sales are expected to grow 3.1 percent to $174 billion in 2012, according to the National Restaurant Association’s (NRA) annual Restaurant Industry Forecast.
The NRA announced Forecast results in a webinar today.
Hudson Riehle, senior vice president of the NRA’s Research and Knowledge group, said during the webinar that limited-service growth will outpace that of the full-service industry, which is expected to grow 2.9 percent to $201 billion in sales.
The restaurant industry as a whole is expected to do $632 billion in sales this year, some $21 billion more than 2011.
Riehle said the restaurant industry has had and will continue to have a big hand in stimulating job growth, a major concern across the U.S. during this election year. The industry added 230,000 jobs in 2011, while the national economy added a total of 1.6 million jobs.
“When you think about how restaurant-industry performance has related to the national economy, the job growth is definitely higher than the national job growth,” he said.
“Job growth this year for the restaurant industry will be 2.3 percent. That compares to an increase of just 1.3 percent in the national economy.”
While anticipated sales and job growth might make 2012 seem rosy, operators still face steep challenges in the year ahead. First among them is increasing wholesale food prices, which Riehle said went up 8 percent in 2011.
Key ingredients that experienced major increases in price in 2011 include flour (up 22 percent), coffee (18 percent), eggs (17 percent), beef/veal (15 percent), butter (13 percent), pork (12 percent), and sugar (11 percent).
Riehle said wholesale food prices are expected to increase 4 percent in 2012, adding that while the economy has been operators’ No. 1 concern the last three years, food prices take the spot this year.
“From an operator’s perspective, these continued and sizeable gains in wholesale food price inflation do obviously put pressure on pre-taxed profit margins, as well as make the focus from an operator’s perspective on productivity, efficiency, and effectiveness much more important,” he said.
Riehle said that with this increased pressure to bolster sales, and with job growth leading to more consumers wanting to dine out (41 percent of consumers are not dining out as much as they’d like, according to the Forecast), restaurants will need be more in tune with new technologies that can help with their marketing efforts.
“It behooves restaurant operators to constantly remain top of mind in consumer decision making,” he said. “You will obviously see more and more operators focusing their efforts on promotional marketing and social media opportunities to achieve that top-of-mind reach.”
By Sam Oches