01/10/2020 The study provides an insightful look at the industry and its challenges and opportunities, based on a number of national surveys of restaurant owners, operators, chefs and customers.
The National Restaurant Association released its 2020 Report on the State of the Industry of Restaurants, which discusses key factors affecting the restaurant industry, including the current state of the economy, operations, labor force, food and menu patterns across the fast-service to fine dining segments. The study provides an insightful look at the industry and its challenges and opportunities, based on a number of national surveys of restaurant owners, operators, chefs and customers.
Main findings on economic conditions include:
- Sales of the restaurant industry are expected to hit a record $899 billion in 2020, with a modest 4% growth rate representing general economic conditions.
- Consumers will continue to be the driving force in the economy, driven by a stable labor market and solid household balance sheets.
- Market appetite remains strong, with almost half of all adults saying they want to use restaurants more frequently.
"In its eleventh consecutive year of expansion, the restaurant industry is responding to customer tastes more rapidly than ever before," said Hudson Riehle, Senior Vice President, Research and Information Division, National Restaurant Association. "Consumers tell us that they want to use restaurants more than they are now, and the challenge for the industry is to reach consumers wherever they want to go. This year, we expect to see growth in off-site choices, a technology that streamlines operations, and more restaurants that speak about their increased sustainable and eco-friendly practices."
The opportunity lies in off-premises
Off-premises will be a big growth driver in 2020. To be successful, restaurant operators will try to find the right formula of on-and off-premises for their businesses, as customers search for convenience, but will continue to look to the social escape that restaurants offer.
When asked about ways in which restaurants should integrate more technology, customers ideally discuss frictionless, convenience-and service-enhancing items rather than people-eliminating items. Other main operations takeovers include:
- In general, restaurant operators are optimistic about market conditions, but expect continuing difficulties that affect both the top and bottom lines.
- Off-premises will be the key driver of revenue growth in 2020 and beyond, and many restaurant operators are devoting more capital to this side of their market.
- Restaurant operators recognize that the use of technology offers a strategic advantage and, as such, invest in customer-oriented innovations that will maximize quality and comfort for their customers.
Employment opportunities abound
The restaurant industry remains one of the most significant employers in the economy – for a year or a lifetime. Sixty-three percent of adults reported working in the restaurant industry at some point in their lifetime; 48 percent had their first daily restaurant job.
Recruitment and retention of workers appear to be a major challenge for operators in 2020 with low unemployment and rising work openings. However, of the job vacancies that were completed in 2019, almost half were filled either by new entrants to the workforce or by people promoted from other positions in the same restaurant. Other key figures on the condition of the workforce include:
- More Jobs: The restaurant industry is expected to have 15.6 million restaurant and food service jobs in 2020.
- Good jobs: the restaurant workforce is as diverse as the communities it serves, and this year the industry will provide increased employment opportunities at all levels of business.
- Potential for All: Older adults' participation in the restaurant workforce will continue to rise as their labour force numbers are projected to increase dramatically.
Good, safe choices are increasing alongside the can preference for alcohol
Consumer interest in healthier menu choices will remain high in 2020, and customers will make decisions on the basis of the availability of healthy offerings. Alcohol is a key market factor in the fine dining category, with almost two-thirds of orders, including alcoholic drinks. Alcohol will extend beyond this segment in 2020 with operators in all but one category aiming to increase their alcoholic beverage offerings in order to keep up with shifting customer tastes and preferences. Main statistics on developments in food and beverage include:
- 76% of adults say they are more likely to visit a restaurant that offers locally sourced food, and 79% of adults say they are more likely to visit a restaurant that offers healthier menu choices.
- 65 percent of millennials state that they are more likely to go to restaurants serving locally sourced alcoholic drinks.
- 53% of chefs claim that low-alcohol beers and drinks will continue to grow in popularity in 2020.
"Consumers are embracing the industry more as they continue to move their spending away from physical products and to experience, opening up avenues of opportunities and growth in food, beverage and technology. We're excited to see how these changes and innovations will take place in 2020 and beyond," said Riehle.