RestaurantNews.com reported that while the operating environment will remain challenging, America's 980,000 restaurants are expected to post record sales and continue to be a leading job creator next year, according to the National Restaurant Association's 2013 Restaurant Industry Forecast.
The association reported that total restaurant industry sales are expected to exceed $660 billion in 2013, up 3.8 percent over 2012, marking the fourth consecutive year of real sales growth for the industry.
It also said 2013 will be the 14th straight year in which restaurant industry employment will outpace overall employment.
RestaurantNews.com said restaurants will employ 13.1 million people next year as the nation's second-largest private-sector employer and will represent 10 percent of the total U.S. workforce.
"Despite a continued challenging operating environment, the restaurant industry remains a strong driver in the nation's economy," said Dawn Sweeney, president and CEO of the National Restaurant Association, in the report.
"The fact that the restaurant industry will continue to grow in an operating environment that presents substantial challenges is a testament to the essential role that restaurants play in our daily lives," said Hudson Riehle, senior vice president of Research & Knowledge for the National Restaurant Association.
"Restaurants are offering products and services that consumers actively seek out and enjoy, an activity in which consumers are selecting to engage despite cash-on-hand restraints because it is an important component of their lifestyle," Riehle said.
Workforce outlook
RestaurantNews.com, citing the association's report, said total U.S. employment grew at a rate of 1.4 percent in 2012, while restaurants added jobs at a 3 percent rate.
In 2013, the association expects the restaurant industry to add jobs at a 2.4 percent rate, stronger than the projected 1.5 percent gain in total employment.
The report also said the association expects restaurants to add 1.3 million positions in the next decade, pushing industry employment to 14.4 million by 2023.
"Because of this strong growth in restaurant employment, labor challenges will start to re-emerge next year," said the report.
"Recruitment and retention, which was a top challenge pre-recession, will make its way back onto restaurant operators' radar as the U.S. labor pool is starting to become shallower," it said.
Challenges and opportunities
RestaurantNews.com reported the association found the top challenges cited by restaurateurs include food costs, the economy and health care reform.
After increasing steadily in the past three years, wholesale food costs will continue rising through 2013, putting significant pressure on restaurants, said the report.
"Because of these prolonged cost pressures, restaurant operators will continue to use creativity and innovation to drive out cost inefficiencies and increase productivity to not pass along the increases to consumers at the same rate," said the report.
The report said the sluggish economic and employment recovery affects consumers' disposable income, which directly affects restaurant sales. It found there is pent-up demand for restaurant services, with two out of five consumers saying they are not using restaurants as often as they would like. As the economy improves, sales could rise.
According to the report, health care reform will put additional cost pressure on some restaurant operators. Most restaurants operate on pre-tax margins of 3-5 percent.
A third of a typical restaurant's sales are spent on labor costs, so increases in those costs will put pressure on cost-management measures, the report said.
Consumer trends
The report found that consumers' interest in technology "continues unabated."
"At table-service restaurants, more than half of consumers say they would use table-side electronic payment options and 44 percent would use a table-side ordering system," said the report.
"Nearly one-third would use mobile payment options, four in 10 would use tablet menus (such as iPads), and 50 percent would use a smartphone app for viewing menus, ordering or making reservations," it said.
However, fewer than one in 10 table-service restaurants offer the options, although 54 percent say they will invest in more customer-facing technology in 2013, it said.
At quick-service restaurants, 44 percent of consumers say they would use self-order terminals, two in five would use smartphone apps to place orders or view menus and more than one-quarter would use mobile payment options, the report found.
Currently, fewer than 2 percent of quick-service restaurants offer the technologies, although 48 percent say they plan on investing more in such technology next year.
Also among the strongest consumer trends are local sourcing and nutrition.
More than seven of 10 consumers say they are more likely to visit a restaurant that offers locally produced menu items, and more than six of 10 said locally sourced menus are a key attribute for choosing a restaurant, the report said.
"Currently, a majority of table-service restaurants offer locally sourced produce, meat or seafood, with availability being highest in the fine-dining segment," it said.
In addition, more than seven of 10 consumers say they are trying to eat healthier at restaurants than they did two years ago, with 75 percent of women and 66 percent of men saying so.
Similarly, about three-quarters of consumers say healthy menu options are an important factor when choosing a restaurant, with 80 percent of women and 71 percent of men saying so.
Restaurants are responding; 86 percent of consumers say restaurants are offering a wider variety than they offered two years ago.
For more information about the 2013 Restaurant Industry Forecast, visit Restaurant.org/Forecast.