Industry News | December 13, 2007

NRA 2008 FORECAST COVERAGE: Predicts 2008 To Be a Year of Snacks

WASHINGTON, D.C.--In its 2008 Industry Forecast, the National Restaurant Association Wednesday pointed to the snack industry to post the highest sales increase in 2008 with an expected 3.2 percent real sales increase in the upcoming year.

The quick-service segment, which the organization figures separately from snacks, is expected to experience a 0.8 percent real sales increase while the full-service segment is predicted to see the smallest (0.7 percent) increase. In total, the restaurant industry is expected to experience a real sales increase of 0.9 percent, reaching $558 billion in sales, in 2008.

Of the nearly one million domestic restaurants, the quick-service segment (including snack and nonalcoholic-beverage concepts) will represent one-fourth of the units in the U.S. Hudson Riehle, senior vice president of research & information services, says that number is likely to increase in the upcoming year.

"The fact is that quick-service operators in terms of unit growth will continue to move ahead," he says.

According to Riehle, development within the segment will be fueled by the desire to open units in nontraditional places to increase convienence for consumers. "The size of the site is being downsized to fit in new locations that offer consumers greater accessibility," he says.

Despite expected growth, quick-serves will continue to battle labor issues in 2008. According to the organization's projections, restaurant employment in the next decade will increase by 16 percent while the workforce will grow only 9 percent. In addition, the number of 16- to 24-year olds in the labor force is expected to decline by 7 percent in the next ten years. Out of all the segments, quick-serves reported hiring the most foreign-born employees (40 percent). Of the entire industry's employees, about 21 percent are Hispanic.

Some states are projected to experience more job growth than others. Arizona is the top ranked with an expected industry job growth of 26.9 percent, followed by Nevada with 25.8 percent. California is expected to hire the most foodservice employees in 2008 (1,456,000).

Following labor challenges, quick-serve operators expect their top challenges to be food costs and gas/energy prices. Customers are also feeling those pinches. The organization predicts that disposable personal income will fall slightly from 2007 to 2008 (from 3.6 percent to 3.4 percent). To the disappointment of customers, menu-price inflation will remain relatively unchanged.

By Blair Chancey

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