Restaurant industry to improve, thrive in 2014

December 19, 2013

The NPD Group forecasts foodservice traffic and sales will improve in 2014 compared to 2013. Real disposable income is forecast to grow, inflation will remain moderate, and unemployment will continue to inch downward in the year ahead. While consumers’ mindset for cautious, controlled spending is expected to remain in place for some time, the NPD’s forecast of traffic and dollar growth for 2014 shows improved performance compared to 2013.

NPD predicts areas of continued or expected strength in consumer demand. For example, its forecasts indicate traffic will build for fast casual restaurants, sub shops, and gourmet coffee/donut outlets. Additionally, convenience stores are likely to experience traffic growth as they take advantage of consumers’ current tendency to “trade-down” from more expensive options. Food retailers offering convenient meal solutions make up another market segment projected to see continued growth, and it should capture more visits from traditional restaurants.

Here are some more NPD predictions for 2014:

  • Current food trends to continue. The expected rise in beef prices and lower chicken prices will be reflected in menu offerings. New and different non-beef parings of foods will result in overall growth for chicken products and a dampening of beef orders resulting from expected price increases.
  • The growing diversity of the U.S. population drives shifts in menu offerings. Beyond the overall impact of supply and price, changes in the composition of the U.S. population will support shifts in menu offerings. The influence of the growing U.S. Hispanic population is reflected in the increased popularity of fruits, juice drinks, and more flavorful spices and seasonings. The growing Asian population carries its influence on menus, as well, with noodles, rice, specialty sauces, and other foods and flavors.
  • Boomers and seniors will continue to increase their visits. Boomers and their older counterparts have been less affected by prolonged high unemployment and the recession. These individuals have continued to visit restaurants at an ever-increasing rate. Their importance to the foodservice industry will continue to grow; the group is too large and important to be overlooked.
  • Restaurant operators will find new ways to incent customers to visit. Going forward, rotating offers and creating new ways to entice consumers to visit must be a part of any operator’s marketing plan.
  • Mobile technology will be key to building relationships with existing customers. Consumers’ use of mobile devices for ordering and paying for meals and reporting on the meal experience will continue to grow as mobile technology becomes even more integrated into everyday life.
  • Growing interest in access to healthy menu offerings. Consumers expect operators to deliver against perceptions of healthier eating with menu emphasis on fresh ingredients and freshly-prepared foods.
  • Fine dining restaurants will continue to fare well. Fine dining has fully recovered from the recession and is growing. Supported by the segment of the population least impacted by the economic slowdown, these restaurants have made efforts to become “more contemporary.” They are now more casual in décor and accepting of casual attire. This trend and growing appeal is expected to continue.
  • New businesses, new concepts will emerge. Entirely new concepts are emerging on the landscape. An example is the My Fit Foods chain that offers freshly-prepared meals that can be taken home and heated up or eaten on premises. Outlets like Lyfe Kitchen, which address the interest in fresh, healthful food, will increasingly appear on the scene. In addition, operators are making more concerted efforts to provide their food where their customers work, with catering.