The restaurant industry’s financial performance for the remainder of 2013 will not be quite as high as expected, according to new data from foodservice consulting firm Technomic Inc. However, upscale steak and seafood restaurants will fare well this year and the overall industry will pick up again in 2014.
In January of this year, Technomic said that foodservice industry sales would grow at a rate of 3.9 percent in 2013, compared to 2012. Now, the firm has lowered its projection to 3.8 percent for the year.
“In general, foodservice is still facing headwinds that are tempering consumers’ willingness to eat out,” said Joe Pawlak, Technomic VP. “Slow employment gains and stagnant disposable personal income are a drag on growth. Coupled with the January tax holiday expiration and pending government spending cuts from the sequestration, consumers are more cautious about their own discretionary spending,” Pawlak added.
The lowered restaurant outlook could impact full-service restaurant chains, which include seafood chains such as McCormick & Schmick’s and Red Lobster.
“Consumers tell us that they are experiencing ‘fatigue’ when it comes to full service chains. There is little differentiation among chains in terms of offerings and ambiance. Value is also an issue: although many chains are discounting or offering deals, consumers feel that independents can provide better value in terms of unique menu items, unique experiences and fair price points,” Pawlak told SeafoodSource.
Independent, upscale seafood restaurants could benefit as a result of this trend, according to Pawlak. For 2012, sales for the top 500 restaurants chains grew 4.9 percent, compared to 5.6 percent for independent operators. Independent restaurants are mostly found in the full-service sector of the market, according to Pawlak.
Still, higher end full-service seafood and steak restaurants are growing at an accelerated rate compared to the rest of the industry. “These restaurants appeal to higher income groups as well as business entertainment, both of which are faring well,” Pawlak said.
In fact, full-service seafood restaurant sales climbed 4.5 percent in 2012. “Red Lobster drives that sales growth, since it comprises such as large portion of the full-service seafood segment,” Mary Chapman, director of product innovation for Technomic, said.
For 2014, Technomic projects the overall foodservice industry to grow at a rate of 4.1 percent.