In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy looks at the economic expectations of restaurant operators and consumers. Based on NRA surveys conducted in April, confidence in the economy remains tenuous among both restaurant operators and consumers.
As detailed in the May 3 Economist’s Notebook, consumers’ assessment of the national economy remains glum, with only one out of 10 adults describing economic conditions as “excellent” or “good.” In the same national survey of 1,000 adults conducted April 25-28 for the NRA by ORC International, consumers were asked what they thought would happen to the economy over the next six months.
For the most part, expectations are for more of the same, with only 23 percent of adults saying they think the economy will get better over the next six months. Twenty-four percent of adults think the economy will get worse in six months, while 52 percent expect economic conditions to remain about the same as they are now.
Economic expectations don’t even rise along with household income. Among adults from households with annual incomes between $75,000 and $100,000, 22 percent think the economy will get better in six months and 35 percent think it will get worse. The 35 percent reading was the highest negative outlook out of any demographic category. Meanwhile, only 27 percent of adults in households with annual incomes of $100,000 or more think the economy will get better in six months.
For their part, restaurant operators are only slightly more optimistic than consumers. In the NRA’s April 2013 Restaurant Industry Tracking Survey, only 32 percent of operators said they think the economy will improve in the next six months. Twenty percent of operators expect economic conditions to deteriorate in the next six months, while 48 percent expect conditions to remain about the same.
Given these tepid numbers, it’s not surprising that the economy remains atop the list of challenges among restaurant operators. Twenty-six percent of operators said the economy is currently the top challenge facing their business, finishing well above food costs (15 percent) and building/maintaining sales volume (15 percent).
Recruiting and retaining employees – the perennial concern during ‘normal’ economic times – was indentified as the top challenge by only four percent of restaurant operators in April. Flash back six years ago before the economic downturn, when recruiting and retaining employees was consistently reported as the top challenge by one-third of restaurant operators.
Read more from the Economist’s Notebook and get additional analysis of restaurant industry trends on Restaurant TrendMapper (subscription required).
Outlook for the Economy in Six Months
Restaurant Operators and Consumers
Source: National Restaurant Association, based on surveys fielded in April 2013