Many things can happen in the restaurant industry given its highly competitive nature where innovation is the king. Statistics show that the restaurant industry has performed well in 2013 with stocks up by 13.3% according to the Dow Jones US Restaurants and Bars Index.
This trend is also collaborated by the recent Gallup poll. According to this survey, most Americans view restaurants favorably. The restaurant industry is on top of the list of business sectors and industries in the latest Gallup Poll.
The survey focused on the perceptions of Americans about the restaurant industry along with 23 other business sectors, including the federal government. Results of the poll indicated that the restaurant industry outperformed the computer industry by 4 percentage points, garnering a net positive response of 60.
It should be noted that the last time the restaurant held top spot in the poll was in 2007. Since that time, the computer industry has held the number one spot. By regaining the top spot, the restaurant industry is poised to make its comeback with more long lasting results.
“Restaurants are the cornerstone of communities across the country,” said Dawn Sweeney, President and CEO of the National Restaurant Association. “From the local sandwich shop to the city steakhouse, the restaurant industry provided job opportunity to 13.5 million Americans and has become an essential part of our everyday lives,” she added.
However, there is a significant shift in the eating habits of people in the ages of 18 to 30. Trends show that they are eating out less compared to what the baby boomers are doing during their heyday. Understandably, many in the restaurant industry are worried and would naturally want to reverse this decline. If this trend continues, there will be around 50 to 60 million young people who will not be eating out the meals that restaurants are serving.
According to the NPD Group, restaurant visits from this age group has dropped 16% compared to the previous four years. Their research indicated that the restaurant industry has failed to pick up even as the economy improved.
“The outlook for the restaurant industry over the next 10 years is dismal,” says Bonnie Riggs, NPD restaurant industry analyst. Restaurant sales are not expected to grow more than 4 percent in the next decade.
In fact, McDonald’s has stunned its investors the previous month when it came out with an announcement saying that sales has fallen 1.2% in stores open for at least a year. This is in contrast with their experience of increasing sales for the previous entire decade.
Ms. Riggs of NPD said that with this situation, the wisest thing that the restaurant industry could do is to focus on the baby boomers. “They’re holding the industry even at this point,” she said.
It is good that the restaurant industry is not taking this situation for granted. To compensate for the decline of support from the younger set, some of the biggest chains of restaurants are putting out their efforts overseas. For instance, Krispy Kreme has a total of 678 locations, but only 146 of those are in the United States.
This fast food chain is even planning to increase the number of its stores to 1,300 by 2017, and 900 of these stores will be located outside of the United States. Majority of their new stores will be opened in India which has a commitment of about 114 outlets.
Expansion is not the only way the restaurant industry is reacting to the reduce support from young people. Many restaurant chains are now on the process of improving the meals they are offering their customers.
There are a lot of ways meals can be improved. Some have claimed that they are now offering better burgers. Others have included locally grown food in their menu. Many are now turning to nutritious meal servings to attract health conscious patrons.
Americans are used to eating a lot of meat in their meals. But according to Liz Aviles, VP of Market Intelligence of Upshot, this is starting to change. According to her, in a span of five years, the “Meatless Mondays” and people’s commitment to less meat consumption will change the character of the fast-food and restaurant industry.
It is hard to imagine that there’ll no longer be burgers sold in fast food chains. The guess of Aviles is that they are going to evolve into “better and cleaner burgers”. Fast food chains like Hooters and Ruby Tuesday can offer such meals by using fewer preservatives and a definite move towards healthier and more nutritious meals.