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NRA releases '08 forecast, partners with Podcast Grill
12/13/07 - Valerie Killifer
NetWorld Alliance, publisher of Fast Casual magazine and Podcast Grill, has partnered with the National Restaurant Association on the production of several restaurant-industry podcasts. The three-part series covers the 2008 Restaurant Industry Forecast and will be available for download Dec. 13 at www.restaurant.org.
The NRA released its 2008 industry forecast and public policy agenda Dec. 12 during a press conference at the National Press Club in Washington, D.C.
NRA president Dawn Sweeney said 2008 will mark the 17th consecutive year of restaurant-industry growth. Sales are expected to reach $558 billion in 2008, a 4.4 percent increase over last year's $537 billion. Overall, the total restaurant-industry impact will be more than $1.5 trillion in 2008.
The industry will employ 13.1 million individuals throughout its 945,000 locations during the year.
Hudson Riehle, chief economist for the NRA, said growth rates, although they will reach a record high, are softening compared to two and three years ago.
"That basically mirrors the overall economic environment, which is obviously softening," he said. "But it's important to keep in mind that overall consumers continue to embrace the restaurant industry in their daily lifestyle."
The percentage of food dollars spent away from home has been forecast at 48 percent. "That means that if you look at all the spending on food in America today, almost half — at 48 percent — is allocated toward the restaurant community," Riehle said.
In comparison, 25 percent of food dollars in 1955 was allocated toward restaurants.
Sales at full-service restaurants are projected to reach $187 billion in 2008, while sales at quick-service locations are expected to reach $156 billion for the year, according to the NRA. Additionally, sales at snack-and-nonalcoholic beverage bars are targeted to reach $20.9 billion in sales.
Despite positive increases, a few challenges will continue to face restaurant operators in 2008, including gasoline and wholesale food prices; however, "a lot depends on where consumers and operators are located and how different factors will play into sales," Riehle said.
Food and beverage
According to an association survey of more than 1,000 chefs, bite-size desserts and small plates will be the hot dining trends of 2008. Other trends include the use of locally grown produce, organic produce and specialty sandwiches.
"Chefs also told us they're seeing increased popularity with ethnic cuisines. It's not just the old favorites of Italian, Mexican and Chinese anymore," said Sue Hensley, association senior vice president of marketing, communications and media relations. "We're seeing a lot of ethnic fusion — flatbreads, Latin American, ciabatta and Mediterranean all ranked very highly in this survey."
Driving the trends is Americans' desire for using restaurants as a way to try new things.
"They're seeking out exotic new experiences," Hensley said. "Restaurants are really trying to diversify their menus to please diners' palates. Whether it's new items or new twists on traditions, that's really happening in restaurants all across the country."
In the quick-service space, trends include the addition of wraps, pitas and tortillas; entrée salads; breakfast sandwiches and energy and specialty coffee drinks.
Other consumer-oriented trends include healthy eating, going green, food to go and ordering options.
Legislative agenda
NRA senior vice president of government affairs and public policy John Gay said the industry will see growing challenges in Washington, D.C., over the next year. Although the association does not expect big-ticket items to pass Congress in 2008, "we have to remain vigilant because there are smaller ticket items, some good and some bad, which could get through in 2008," he said.
On the positive side, the association is working toward the passage of bill aiming to address a depreciation tax code. The bill would make permanent the accelerated depreciation schedule of 15 years for both new building construction and improvements for restaurants in the United States.
Under current tax laws, owners of most commercial buildings — restaurants included — depreciate the building's original cost, plus the cost of subsequent building renovations and improvements, over 39 years. Recognizing that some businesses suffer particularly heavy daily wear and tear, Congress has sped up the depreciation schedule for certain businesses, but not for restaurant operators.
On the negative side, Gay said there is a great desire for Congress to act on alternative fuels legislature, which could mean a decrease in corn and soybean products for restaurant use.
The industry also will see food safety as a continuous issue.
"With this global economy, we have to realize that now we need to expand our reach beyond the back of our restaurants to include the entire supply chain and have a farm-to-table approach for our food-safety program future," said Dr. Donna Garren, vice president of health and safety regulatory affairs for the association.
Immigration reform is not expected to return as an issue in 2008, but immigration legislation will be seen at state and local levels, according to the NRA.
Bills include mandates requiring employers to use United States' government database for employee Social Security authorization, with proposed penalties that can include the loss of a business license as well as monetary fines.
Health-care costs also remain a major concern, with three out of four operators reporting a substantial health-care cost increase over past two years.
"The industry is growing as our challenges, Gay said. "Across the board we are facing more challenges. We must and we will continue our activities at state and local levels."
