Restaurant Industry Forecast for 2018
by Kevin Stockslager, Assistant Vice President at Wray Executive Search
This past year was an interesting, and perhaps challenging, one for the restaurant industry. While industry sales are projected to approach $800 billion for 2017, according to the National Restaurant Association (NRA), the year was plagued by declining same store sales and traffic, coupled with several companies declaring bankruptcy, in an otherwise stable economic environment. Also of note, the restaurant industry witnessed increased activity for mergers and acquisitions, with several large brands being acquired. Many within the industry predict that this activity will continue into the early part of 2018.
This upcoming year, many of the same challenges facing restaurant owners and operators will continue to be present. The political environment and gridlock in Washington, D.C. continues to be one that has caused uncertainty amongst consumers. Several economic and legislative policies in the works have the potential to significantly impact the restaurant industry. Additionally, labor-related costs look to be another possible roadblock to sales growth. Restaurant owners and operators consistently rank labor as one of their top concerns and the national pressure to increase wages does not look to be letting up in 2018. The issue of retaining good employees and recruiting new employees will not go away in 2018, especially as unemployment rates drop and the talent pool continues to shrink.
As restaurants continue to strive to reverse the 2017 trends of declining same store sales and traffic, the focus of 2018 seems to revolve around convenience and technology. During the past year, convenience took center stage across all segments of the restaurant industry, not just the quick serve segment typically associated with speed of service and convenience. Restaurant companies have started to, and will continue to, aggressively pursue delivery, catering, and pick-up ordering in an attempt to drive sales growth. Of course, the increased implementation of technology will continue to be a strong focus in 2018 and beyond. From quick serve to casual, every segment has been testing, evaluating, and integrating technology into their platforms, such as in store kiosk ordering, app ordering, or website ordering.
Happy Holidays and Cheers to a Happy, Health, and Prosperous 2018!
Kevin Stockslager, AVP