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Restaurants ready to heat up

Posted: May 27, 2011 1:55 a.m.
Updated: May 27, 2011 1:55 a.m.

Sales are expected to increase as more diners visit restaurants in 2011. Improved business is good news for restaurant owners after a three-year drought, but this summer should be the real test for how well local eateries perform.

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More than 2-in-5 consumers said they were not dining out as often as they would like during the Great Recession.

But that trend appears to be changing, according to the National Restaurant Association, a nearly century-old advocacy group.

Sales are expected to post positive numbers in 2011 after a three-year period of negative sales, according to the association.
Industry sales are expected to reach $604 billion this year, a 3.2-percent increase over 2010 sales.

“The U.S. restaurant industry is an economic juggernaut whose annual sales are larger than 90 percent of the world’s economies,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association.

“If it were a country, it would rank as the 18th largest economy in the world. While pockets of challenges remain, we are looking forward to a brighter future in 2011.” 

Economic health
With nearly 1 million restaurants nationwide, sales at restaurants represent 4 percent of the U.S. gross domestic product.

“As in 2010, restaurant industry job growth is expected to outpace the national economy this year, emphasizing the importance of industry to the nation’s economy,” Riehle said.

The industry also employs nearly 10 percent of the U.S. workforce, making it the country’s second-largest private-sector employer with 12.8 million employees. It is expected to add jobs at a rate of 2.4 percent in 2011, adding 1.3 million positions, the association reports.

With two-career families and the easy access of restaurants in most communities, the restaurant industry’s share of the food dollar is estimated to be at 49 percent, despite the difficult economy.

Full-service restaurants are projected to reach $194.6 billion in sales in 2011, an increase of 3.1 percent over 2010. Projected sales at “quick service” restaurants are $167.7 billion this year, a gain over last year of 3.3 percent.

Consumer habits
As household finances allow, 88 percent of adult diners say they enjoy going to restaurants.

Reflecting changes in dietary habits, 7-out-if-10  diners now say they try to eat more healthfully.

Restaurant operators agree, saying two-thirds of diners now order more healthful foods and pay more attention to nutritional content than they did in the previous two years.

If patrons’ favorite restaurants operated food trucks, 47 percent of consumers say they would buy meals and food items from the food trucks, as well.

Local habits
Local dining habits were perhaps affected more than other parts of the country said Greg Amsler, owner of Salt Creek Grille, a full-service restaurant in Valencia.

“We got hit a little harder in this recession because of the real estate market,” Amsler said. “Santa Clarita Valley is so real estate-based.”

The restaurant has seen an improvement in 2011, but Amsler said, gauging how much business has improved is difficult, because so many new restaurants opened in the area at the same time — without an increase in the customer base.

“This summer will be a real barometer because of gas prices,” Amsler said. “If people are feeling good about the economy, we’ll continue to see an increase but if they’re feeling skittish we might see them pulling back on vacations and how much they spend to eat out.”

Restaurant owners
Social media is increasingly playing a larger role as a marketing tool, according to 8-out-of-ten restaurant operators. More than half also say they are likely to use online tools and social-media sites in their marketing mix in the next two years.

Driving the marketing change is media-savvy consumers who frequently use at least one online or social media tool.

Diners who use social media often dine out more frequently than the general public, the National Restaurant Association reports.

Chefs canvassed in a “What’s Hot in 2011” survey also ranked food trucks and pop-up restaurants as the newest trend in 2011.

The survey is conducted annually by the association, and collects feedback from professional chefs, all members of the American Culinary Federation.

The top two trends reported by the chefs are to prepare meals with locally sourced meats and seafood, along with locally grown produce, adding to the popularity of many local farmers markets.

Ethnic-inspired meals, appetizers and side dishes top the list of chef’s newest creations for their respective eateries.

The industry segment expected to show the strongest growth in 2011 is among social caterers, for which sales are expected to increase by 6.2 percent.

Recovery
Pent-up demand may have been one factor in diners choosing to return to restaurants in greater numbers at the beginning of 2011.

Feeling better about the economy was another.

As the economy slowly improves, the restaurant industry is climbing out of its most challenging period in decades, Riehle said.

In February, Amsler addressed a group of business people at the SCV Chamber of Commerce luncheon, saying his restaurant’s goal in 2010 was simply to still be open in 2011.

As gas, grain and beef prices have continued rising, restaurants have had to work very hard to keep prices affordable for consumers during and after the severe economic downturn.

Although the National Restaurant Association expects the industry to post positive numbers this year, Amsler is predicting that locally, restaurants will only post modest increases over last year.

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