Restaurant sales expected to keep growing

employee turnover, cost of obamacare and food among obstacles

Los Angeles TimesDecember 25, 2012 

The American restaurant industry is headed into a year full of obstacles, including health insurance costs related to health care reform, employee turnover, rising food costs and weak consumer spending.

Still, the National Restaurant Association predicts the country's 980,000 eateries will pull in more than $660 billion in sales in 2013 — or 3.8 percent more than this year's revenue stream. If the forecast is accurate, restaurants will enjoy four consecutive years of real sales growth.

The industry will employ 13.1 million people in 2013, according to the recent report. That's a 2.4 percent rate of employment growth, which is slower than the 3 percent pace set by restaurants this year but much higher than the overall 1.4 percent rate among all employers.

During the next decade, the association expects restaurants to hire 1.3 million new employees, bringing the total food-service work force to 14.4 million by 2023.

But the surge in workers means a shallower labor pool. Long-running restaurant industry problems, such as the difficulty in recruiting and retaining employees, probably will be exacerbated, according to the association's forecast.

And many restaurant owners worry that once President Barack Obama's health care reform takes effect in 2014, their slim margins will be squeezed even more. Major eatery businesses such as Papa John's and Olive Garden parent Darden have started fretting about the requirement to provide access to coverage for all full-time employees.

And the aftershocks of a severe summer drought will continue inflating wholesale food and beverage costs, already high after several years of increases and responsible for sucking up a third of restaurants' sales, according to the restaurant group.

The tepid economy and continuing high unemployment still give consumers second thoughts about their discretionary spending. Nearly half of Americans say they don't patronize restaurants as often as they'd like.

Eateries also will have to struggle with evolving diner preferences in 2013.

More consumers say they want table-side electronic payment options, mobile ordering systems, self-order kiosks, tablet menus and smartphone apps for reservations. Fewer than one in 10 restaurants has such capabilities now, but more than half told the restaurant association they're investing in new technologies next year.

And more than seven in 10 consumers say they're looking for more healthful and locally sourced menu items at restaurants — a trend that even industry giants such as McDonald's have been hustling to follow.

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