As part of our mission to be the go-to resource for on-the-go restaurant industry professionals, Modern Restaurant Management magazine (MRM) offers highlights of recent research.
Despite declining unit counts for the last two years, independent restaurant operators represent a third of broadline foodservice distribution dollars, and their spending has increased year-over-year for the past two years, according to The NPD Group. The number of commercial independent restaurants dropped by two percent to 336,545 units from fall 2014 to fall 2015. Although their numbers dwindled, independent operators increased their spending with broadline foodservice distributors in 2015 by three percent and by five percent in 2014, according to NPD’s SupplyTrack.
The consumption of breakfasts and morning snacks, in and away from home, is forecast to grow faster than the U.S. population over the next few years, reports The NPD Group. The need for speed, affordability, and portability are the reasons why morning meal traffic, which includes breakfast and morning snack, at traditional quick service restaurants has been growing. In the year ending February 2016, morning meal visits to quick service restaurants increased by five percent on top of a three percent increase during the same period prior year. Even with the strong growth of away from home breakfasts, the majority, 70 percent, of breakfast meals are consumed in the home.
The chain restaurant industry’s sales growth continued to decline during April, the worst month since January 2014. Same-store sales growth was -1.0 percent, a drop of 0.3 percent below sales reported in March, according to data reported by TDn2K’s™ Black Box Intelligence™ through The Restaurant Industry Snapshot™, based on weekly sales from over 24,000 restaurant units, 120 + brands, representing $61 billion dollars in annual revenue.
For the last two months, as the industry’s overall sales growth dropped into negative territory, the best performing segment by far has been by far Quick Service. Additionally, according to Black Box Intelligence research, Quick Service was also the only segment that significantly gained sales market share year-over-year by the end of 2015.
April’s soft sales were widespread from a market perspective. Out of the 193 individual DMAs tracked by Black Box Intelligence, 132 of them (68 percent) reported negative sales growth during April 2016. As a comparison, a year ago only 22 percent of DMAs experienced negative sales growth rates.
In addition to restaurant sales and traffic challenges so far this year, workforce related difficulties also continue to escalate. According to a recent poll by TDn2K, the biggest workforce related concern of restaurant operators currently is finding enough qualified employees to fill their vacancies; almost 75 percent of restaurant companies reported this as their biggest worry for the year. The drivers behind this concern are the rapid job growth recently experienced by the industry coupled with alarmingly high employee turnover and vacancy rates.
Data from TDn2K’s People Report™ shows that the number of jobs in the chain restaurant industry grew at a pace of 4.4 percent year-over-year during March. The average growth rate since the beginning of the year has been 4.0 percent. For over two years now the restaurant industry has been outpacing both the overall economy and the retail industry in job creation, which highlights why filling vacancies is such a challenge for restaurants.
According to the International Food Information Council (IFIC) Foundation’s 2016 Food and Health Survey, “Food Decision 2016: The Impact of a Growing National Food Dialogue,” if food is grown regionally or served at a local establishment, consumers are more likely to trust the safety of that food. More than 70 percent of consumers trust the safety of food produced in their region of the country, while just 24 percent trust the safety of food from another country. Consumers were also more likely (55 percent vs. 49 percent) to trust the safety of food from a local restaurant than the safety of food from a national chain restaurant.
Consumers eat an average of 3.7 sandwiches per week, which has remained stable over the past few years. However, consumers are now eating a wider variety of sandwiches and sourcing them from a greater variety of locations as they look for new, unique foods, according to the 2016 Sandwich Consumer Trend Report. While burgers are still consumed most often of all sandwich varieties measured, other varieties—including deli salad, breakfast, flatbread and ethnic sandwiches—are gaining on burgers.
A recent survey conducted by Sparta, a provider of enterprise quality management software (EQMS) solutions, found that a majority (61 percent) of U.S. food and beverage professionals feel confident their organizations are prepared to meet the increasingly strict requirements of the FDA’s Food Safety and Modernization Act (FSMA) in 2016. Nearly half (43 percent) agreed that the regulation will ultimately increase visibility and safety throughout the supply chain. Despite the industry’s optimistic outlook, the survey also revealed a lack of automated systems for managing compliance across the supply chain: More than a third (38 percent) said their organizations manually track, manage and report food quality and safety, while 56 percent of respondents classified processes as partially automated. Only seven percent reported fully automated systems.
More than ever before, consumers are turning to their digital devices to help make dining out decisions easier, including searching for nearby locations and deals, according to RetailMeNot, Inc., a digital savings destination connecting consumers with retailers, restaurants and brands, both online and in-store. The new study today, titled “The Evolution of Dining in the Digital Age,” explores digital savings and mobile habits among restaurant patrons, as well as general habits related to dining out and spending. Nearly a third of consumers (32 percent) have used a deal that they found online or on their mobile device at a restaurant in the past three months. Of the diners surveyed, one in four currently has at least one restaurant-specific mobile app on his or her smartphone. That number increases significantly the more diners eat out. Among people who dine out eight to 10 times a week, more than two-thirds (68 percent) use a restaurant-specific mobile app.
Consumers rely on their mobile devices for a variety of restaurant-related research prior to dining out. Topping the list is finding a restaurant location (53 percent), browsing a menu (49 percent) and researching new restaurants (37 percent). Not surprisingly, younger consumers rely on mobile the most. Consumers aged 25 to 34 are more likely to research new restaurants on their smartphone than any other age group (60 percent).Nearly two-thirds of diners will use their smartphones for a variety of tasks while dining in a restaurant. This includes taking a photo (32 percent), checking in on social media (19 percent) and searching for online deals (19 percent). Other tasks include browsing reviews (17 percent), looking up nutritional information (16 percent) and paying for a meal via mobile (8 percent).