Industry Trends for 2017
by Kevin Stockslager, Associate Vice President at Wray Executive Search
After a slightly improved January 2017, same-store sales (almost 4%) and traffic (5%) both declined during the month of February. As the restaurant industry looks forward to reversing the trends of negative sales and traffic, a few interesting things to watch for in 2017.
To gain interest and traffic, the introduction of new menu items has been a popular move. In the fall of 2016, Arby’s introduced venison sandwiches as a special menu item at 17 stores to coincide with hunting season. The result was such high demand and traffic that the sandwiches sold out within minutes in several of the locations and prompted a follow-up, 1-day only sale of the sandwiches at two Nebraska locations earlier this year. On a broader scale, Chipotle added chorizo as an option to its menu at all 2000+ domestic locations after positive testing in pilot markets. While most new menu introductions won’t be as drastic as the venison sandwich, look for restaurants to continue to look to new or promotional menu items to spark traffic and sales.
In addition to new menu items, restaurants continue to investigate options for the increased use of technology in the form of apps/digital ordering and in-store kiosks. While still a relatively small slice of the overall restaurant traffic and sales numbers, digital ordering has become a high priority investment for several chains, especially pizza brands. However, the opportunity for growth to other segments and brands in 2017 is great. Focusing within the physical structure, the increased use of mobile ordering, payment, and kiosks is something to look for within the QSR and fast casual segments. Citing the positive impact that kiosks have on sales growth, McDonald’s announced plans to have kiosks in 2500+ locations, along with mobile ordering and payment at all domestic locations by the end of 2017. Look for competing brands to follow suit.
As the restaurant industry looks to buck the trend of declining sales and traffic into March and the remainder of 2017, look for additional creative moves to attract customers old and new.
Kevin Stockslager (845) 863-5562