Approaching $800 Billion in Revenues: The Restaurant Industry
by David Ulrich, EVP Wray Executive Search
Surprisingly enough, the restaurant industry just posted its best revenue numbers ever in 2016 topping off at $783 billion. Additional figures show that the industry is quite robust going into 2017, and is poised to increase ever more in the coming years according to Toast: a Restaurant Management blog https://pos.toasttab.com/blog/restaurant-management-statistics
In addition to some improving tail winds like continued low energy prices, a 2.6% rise in projected disposable incomes, and along with an industry that added 312,000 jobs in 2016, this appears, to me, to be a joyous time of celebration and excitement going into 2017 where “the rising tide lifts all boats.” Of course, the segments that continue to shine include many Fast Casual based concepts, along with the QSR space, as well as C-Store brands like Wawa’s that have done a great job in adapting to the consumers demands such as on-line ordering, catering, and improving their food quality and menu selections.
Despite all this good news, the Casual Dining segment overall continues to be in a tail spin with national brands like Applebee’s, Ruby Tuesday, and TGI Friday’s all showing declining SSS that has many of those brands currently operating without CEO’s at the helm and without a prayer to change the inevitable wall of closures.
Though the overall Casual Dining segment has shown a decline over the last 10+ years, there are a countless number of successful companies in this segment that are regionally based and have improved their menu options, as well as their productivity with technology to adapt with consumers changing demands to remain the all coveted honor of “being relevant.”
Take what Hooter’s has done with the introduction of its Fast Casual concept called Hoots. The menu selection is streamlined, the units aren’t too large and over built, and tipping is optional which is very appealing to the younger consumer these days. Even though the original uniforms have been modified to fit the décor, the unit volumes are showing great results so far, and further demonstrate that a commitment to change can actually be made in a legacy brand without having to going down the path of discounting, which ultimately leads to brand destruction.
I remain encouraged that these tail winds along with the released “animal spirits” by many business leaders today will usher in a great wave of economic activity on par with that of the 80’s and 90’s of yesteryear!
David Ulrich (813) 841-7287