Thursday, December 13, 2012

Restaurants' best bet: The frustrated consumer

The silver lining of an otherwise grey-skies outlook for the restaurant business may be the public’s pronounced frustration, according to new research (and maybe a dash of psychoanalysis) from the National Restaurant Association.

In the words of NRA statistical guru Hudson Riehle, the Average Joe isn’t getting enough, and the Average Jill is even more unsatisfied. Observes Riehle: “You can see as a result of the weaker economic environment a substantial pent-up demand that exists among consumers to use restaurants.”

As he explained Tuesday in delivering the association’s 2013 sales forecast, about 40% of adult consumers would like to frequent a restaurant more often than they currently do. That compares with a frustration index of 31% in 2007.

The unfulfilled desire runs higher in women. “One out of every two adult women in America are not eating in restaurants as much as they would like,” comments Riehle. Since women are still the primary meal preparers for families, that finding suggests how much restaurant-meal replacement is happening in America today.

“Obviously those customers, as a result of what’s going on with their net worth and uncertainty over the economic outlook, have moderated their dining-out behavior,” Riehle says.

But he’s a table-half-full kind of guy. People are denying themselves the pleasure of dining out, but “the savvy restaurant operators know [how] and will continue to execute to unlock this pent-up demand.”

And, he notes, “the industry is fortunate in that consumers love to go to restaurants. Ninety-three percent, over nine out of every 10 American adults, report that they enjoy going to restaurants.

“This is a very important competitive hallmark of the industry,” he stresses.

The NRA is forecasting a sales increase for 2013 of 3.8%, or just under 1% if menu price increases are factored out. It expects menu prices to rise by 2.9% on a rise in wholesale food prices of 4.2%, meaning that margins will take a hit.

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