As restaurants rebound, seafood at an advantage
The restaurant industry, forever dependent on consumers’ discretionary spending, is more or less the U.S. economy’s bellwether. It’s easy to see why: When people are working and the cash is flowing, they tend to eat out more often. Over the past two-plus years, the opposite scenario has also held true.
So it makes sense to ask seafood restaurant operators, who often wear their amateur-economist hats, whether the recession is over or not. (After all, $1.5 billion was spent at restaurants daily in 2010.)
They’re saying it is, and they don’t even have their fingers crossed. Optimism — guarded or not — is back in fashion, and that’s the best news the seafood industry could hope for after a long stretch of flat or declining sales. Restaurants’ return to profitability is huge for seafood, since historically about two-thirds of all seafood consumed in the United States occurs via foodservice.
Don’t breathe easy just because tables are starting to fill up again: The Gulf oil spill is still lingering in consumers’ minds; restaurant chains with 20 or more units will soon have to provide nutritional information for their dishes, including calories; and lots of people are still out of work or struggling to get by. Restaurant operators are constantly required to do more to keep pace with the changes and are feeling increased pressure to perform.
Three chains looking to grow in spite of economic challenges — Rockfish Seafood Grill, Ocean Prime and Joe’s Crab Shack — say they’re battle tested and ready for the fight.
“In the new economy, so to say, guests expect a lot more than they used to. Discretionary income is tighter than it ever has been and they’re not going to put it at risk,” says Tommy Lee, CEO of Rockfish Seafood Grill, a 14-unit casual-dining chain based in Richardson, Texas, with locations spread throughout the Lone Star state and one in North Carolina. “[Consumers] are feeling better about their situations and, assuming they have jobs, they’ll spend money but only with businesses they trust.”
Click here to view the rest of the feature on the rebounding U.S. restaurant industry. Written by SeaFood Business Associate Editor James Wright, the story appeared in the March issue of SeaFood Business magazine.