Friday, December 19, 2008

Restaurant industry's 2009 outlook: grim

The National Restaurant Association has just released its 2009 forecast for the nation’s biggest small business, and the outlook is far from good: Transactions will decrease by 1%, though a considerable 3.5% hike in menu prices will inflate dollar intake to a sales gain of 2.5%. It’s the first time in my 24 years of covering the business that I can recall the association forecasting a decline in constant or “real” sales (the absolute change minus the influence of pricing—the measure hardcore number geeks regard as the most meaningful gauge of business activity).

The decline will come from a downturn at full-service restaurants, whose real sales are projected to drop by 2.5%, according to the NRA’s figures. Fast-food places, in contrast, will see real growth of .5%. In any other time, that slightly positive latter figure would have the industry wringing its hands. But in this environment, it’ll probably be met with considerable relief. Flat is the new up.

Of course, those figures have to be kept in perspective. That scant real increase for fast-food places translates into a nominal sales rise of $163.8 billion, or far more than many familiar industries generate in total.

And restaurants will continue to take in more than $1.5 billion a day in 2009, if the NRA forecast is on target.

Not surprisingly, the association found in its research that about one-third of American consumers aren't dining out as much as they'd like, and 35% aren't ordering takeout or delivery as much as they'd like. That's good news: When disposable income starts climbing again, those frustrated consumers may b marching through the industry's front doors again.

For more analysis, follow my live reports on the NRA’s media broadcast of the forecast’s relief, starting now.

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