Restaurants headed for jobs and sales growth, trade group says

Challenges such as high food and labor costs and a shaky economy may be looming, but the National Restaurant Assn. says it’s confident the industry has just kicked off its fifth straight year of sales growth.

Eateries will pull in more than $683.4 billion in revenue in 2014, according to the trade group’s projections Thursday. That’s a 3.6% nominal increase and a 1.2% real boost year over year.

The top five states for sales growth are Arizona, North Dakota, Texas, Florida and Colorado, according to the association.

The group also said it expects the nation’s 990,000 restaurants to employ 13.5 million people this year, making it the second largest private sector boss in the country, with nearly 10% of the entire U.S. workforce.

The industry enjoyed a 3.3% employment growth rate last year, an upward trend the National Restaurant Assn. said it sees continuing.

But it won’t be a smooth road: food prices remain high and consumers are still wary, according to the group. And restaurants must also contend with the effects of healthcare reform as well as with increasing efforts to boost minimum wage levels.

Full-service restaurants and bars ended 2013 “on a particularly weak note,” with foot traffic down 3.3% year over year during the fourth quarter, according to recent data from GuestMetrics. In the last four weeks of the year, visits slipped nearly 6%, likely as a result of a shorter holiday shopping cycle and bitterly cold weather.

Over the full year, traffic declined 1.9% from 2012. Bars and clubs suffered a 3.8% drop during the year, while casual dining outlets dipped 2.2%.

Fine dining establishments fared better, with visits increasing 0.2% in 2013.

Eateries will try to hop on new trends to keep foot traffic and check totals high.

Technology will be a key factor, according to the NRA. Brands such as Applebee’s, which is installing about 100,000 tablets at its tables, and Sonic, which is implementing interactive screens in its stalls, are experimenting with unprecedented connectivity.

Nearly a fifth of consumers told the NRA that technology influences how they choose a full-service restaurant, while even more said it’s important to which limited-service establishments they patronize.

A separate report this week from the NPD Group found that restaurateurs should be careful when promoting new menu items. About 70% of customers told the research group they won’t try menu newcomers.

And when patrons do branch out, it’s more often they will do it at a casual-dining restaurant than at a quick-service joint. Half of all new menu items ordered are main dishes, according to the NPD.


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