2019 State of the Restaurant Industry Report

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What's the outlook for restaurants in 2019? The National Restaurant Association's 2019 State of the Restaurant Industry report provides the details. From sales forecasts to projections for food costs, workforce opportunities, food trends, and technology advances, you'll get the overview here. Our State of the Industry report is available for purchase or as a complimentary download for members of the Association.
Overview
2019 Sales & Economic Forecast
Tableservice & Limited-Service Restaurant Trends
Workforce Trends
Technology Trends
Food & Menu Trends
About This Report
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Five key trends shaping the restaurant industry in 2019:

  • A competitive business environment.
    While restaurant operators generally are optimistic about business conditions, they don't expect a letdown in competitive pressures in 2019. In addition, rising labor costs and a complex legislative and regulatory landscape on federal, state and local levels add pressure on business performance and bottom lines.
  • Staffing is a top challenge.
    The prolonged economic expansion has led to a tighter labor market for business in many industries, but the restaurant industry also continues to be impacted by longer-term structural changes in the labor force. As a result, recruiting and retaining employees will be among the top challenges faced by restaurant operators in 2019.
  • Pent-up demand remains elevated.
    Consumer confidence is strong, their balance sheet is sound, and higher-income households represent a larger share of households than ever before. With consumers’ pent-up demand for restaurant services remaining elevated compared to historical levels, well-positioned operators can still boost traffic in a competitive environment.
  • Technology incorporation continues.
    Technology adoption will keep growing among restaurant operators in 2019, but the trends are not uniform across segments. Consumers would most like to see restaurants incorporate technology that focuses on improving customer service, making ordering and payment easier, and offering more convenient takeout and delivery options.
  • Food preferences continue their rapid evolution.
    Contemporary consumer cravings are dovetailing with emerging societal dining trends. Among the trends for 2019: a more eco-friendly perspective, greater emphasis on global flavors/cuisines, enhanced availability of healthful items and healthful children’s meals, and the exploration of new food sourcing options.

Industry sales projected to reach $863 billion

In this section:

  • Driven by an expanding economy and elevated consumer sentiment, the restaurant industry is expected to register positive sales growth in 2019 — growing to $863 billion in 2019.
  • Although economic growth is expected to slow somewhat in 2019, consumers remain generally upbeat about their personal finances. This confidence, along with a healthy household balance sheet, should lead to additional consumer spending.
  • Measures of business sentiment are decidedly positive, which typically buoys confidence for additional hiring. As long as the potential downside risks of higher interest rates and trade skirmishes remain subdued, the expectation is that business conditions will be positive in 2019.
  • Included in the 2019 State of the Restaurant Industry: Sales projections for various restaurant industry segments … Dashboards on the state of the American economy and American consumer … the 2019 outlook on energy prices and food costs … trends in menu price growth … and the outlook for tourism in 2019.

Off-premises options could provide competitive edge.

  • While restaurant operators are generally optimistic about business, they don’t expect a letdown in competitive pressures. The vast majority of operators say they think competition from other restaurants will hold steady or become even more intense in 2019 than it was in 2018.
  • Although on-premises traffic still represents the majority of business in the tableservice segment, the growing demand among consumers will make off-premises options important drivers across the industry in 2019. Successful operators will focus on the daypart that works best for their segment.
  • Restaurant operators across all segments will focus on building business among younger consumers in the years ahead. To attract these tech-savvy consumers, a majority of operators expect to devote more resources to both social-media marketing and electronic marketing in 2019.
  • Included: Snapshots of takeout, delivery and catering trends … opportunities and trends in the breakfast, lunch and dinner dayparts.

Recruiting and retaining employees a top challenge for 2019

  • With total restaurant and foodservice employment projected to top 15 million in 2019, recruiting and retaining employees will be among the top challenges faced by many operators. More than a third of operators have job openings that are difficult to fill, with the biggest challenge finding applicants for back-of-the-house positions.
  • The prolonged economic expansion has led to a tighter labor market for businesses in many industries, but the restaurant industry also continues to be impacted by longer-term structural changes in the labor force. The recent uptick in teenage restaurant employment may be short-lived, with long-term projections calling for a shrinking teen labor force in the years ahead.
  • The restaurant industry continues its role as a training ground for new entrants to the workforce and a place for upward mobility. Half of limited-service restaurant job openings and four in 10 tableservice restaurant job openings in 2018 were filled by either new entrants to the workforce or people promoted from other positions within the same restaurant.
  • Bonus: Get the outlook for job growth for many restaurant occupations over the next decade, along with projected restaurant job growth by state and the latest data on hospitality-sector turnover.

Restaurants tap technology to boost business

  • Restaurant operators are planning to ramp up their investments in technology in 2019, with the most common focus being customer-facing service-based technology, such as online or app ordering, reservations, mobile payment, or delivery management.
  • While most consumers currently use some amount of technology in their restaurant experience, there is an appetite for even more advancements. A majority of consumers say they would like to see restaurants incorporate more technology with a focus on improving customer service, making ordering and payment easier, and offering more convenient takeout and delivery options.
  • Emerging technologies that rate highest among consumers include service-enhancing items such as tablets at the table, self-service electronic kiosks, and wearable technology for restaurant servers.

Clean and green

  • Chefs predict that restaurant food and menu offerings in 2019 will be influenced by zero-waste cooking, hyper-local sourcing, veggie-forward cuisine and natural ingredients.
  • Local sourcing, healthy options, and eco-friendly food are increasingly important to consumers, and a majority of them say the availability of these options factors directly into their choice of a restaurant.
  • A majority of adults say they are spending more time at home watching on-demand television and videos. At the same time, they expressed an interest in purchasing quality food and ingredients from their favorite restaurant, with instructions on how to cook a meal at home.

The National Restaurant Association each year prepares a comprehensive overview of and outlook for the restaurant industry. The Association's research is considered the most authoritative source for restaurant industry sales projections and trends. It is based on analysis of the latest economic data and extensive surveys of restaurant operators and consumers. The Association's research and analysis have a longstanding reputation of the highest credibility, neutrality and accuracy inside and outside the industry.

The 2019 State of the Restaurant Industry is available for $349, or as a complimentary benefit for members of the National Restaurant Association. Learn more about membership.