The Sales & Economic Forecast of the National Restaurant Association’s 2016 Restaurant Industry Forecast has revealed promising information for our industry. Restaurant industry sales are expected to experience growth this year. In fact, restaurant and food service sales have been projected to increase 5 percent compared to 2015. For the first time since 2004-2005, 2015-2016 is expected to register consecutive years of real growth (inflation adjusted) above 2 percent.
- An expanding economy and continued elevated levels of pent-up consumer demand mean that restaurant industry sales are expected to grow in 2016.
- Restaurant and food service sales are anticipated to total $782.7 billion in 2016, up 5 percent from 2015, which saw sales volume of $745.6 billion.
- Inflation-adjusted sales are projected to increase 2.1 percent in 2016, basically no different from the 2.2 percent gain posted in 2015. This represents the first time since 2004-2005 in which the restaurant industry has registered consecutive years of real sales growth above two percent.
An increased desire for experiences will benefit the restaurant industry, as 56% of adults have said they would rather spend money on an experience, such as a restaurant or other activity, than purchase an item from a store. Nine out of 10 adults say they enjoy going to restaurants, and 78% say that going out to a restaurant with family or friends provides the chance to socialize. They also say that restaurants represent a better use of their leisure time than cooking and cleaning up afterward.
This doesn’t mean that all American adults are rushing back to restaurants. Many adults slowed their spending after the Great Recession and built up their personal finances, putting them in a stronger position to make expenditures in the future. But 7 out of 10 consumers have indicated that they’re still holding back in some fashion from spending money. ORC International, conducting a study for the NRA, found that just 27% of adults say they’re confident in their finances and spending freely. Forty percent of adults say they’re not eating on the premises of restaurants as much as they’d like, and 41% say they’re not spending on takeout or delivery at restaurants as often as they would prefer. This pent-up demand is elevated across the board, with a minimum of one-third of adults in each category saying they aren’t using the services of restaurants as much as they wish.
Generally speaking, however, consumers are optimistic about their personal finances and think they’ll improve this year, particularly those in higher income households. The NRA has found that 44% of adults believe their financial situation will be better in this year than last year, compared to just 7% expecting their position to worsen. The category most optimistic is Millennials: 69% of adults aged 18 to 34 expect their household finances to improve in 2016. Just over one-fifth (21%) of adults aged 18 to 34 indicated that they’re holding back on spending significantly, compared to almost 4 in 10 of their counterparts aged 35 and older. Additionally, 69% of this age group expects that their financial positions will improve in 2016.