Habif, Arogeti & Wynne, LLP’s Retail, Franchising & Hospitality group
The restaurant industry was one of the hardest hit during the Great Recession, when disposable income dried up and families stopped going out to eat. Now, over five years later, the restaurant industry is growing again. Research house IBISWorld predicts that the non-chain restaurant industry alone will post 2.7 percent annual growth for the next five years. So what can restaurateurs expect for the coming year?
- The U.S. economy will improve. 57.1 percent of respondents to Habif, Arogeti & Wynne, LLP’s second annual Halperns’ Food & Wine Survey indicated that they believe the U.S. economy will improve in the coming year. That sentiment has been born out by various economists and news outlets, all of which have been generally upbeat at the 2014 U.S. economy. Additionally, people are finally getting back to work. According to Bloomberg, the Federal Reserve has predicted that the unemployment rate may fall as low as 6.3 percent by the end of next year.
- Labor costs will post a potentially significant increase as the year progresses. The job market may be recovering, but several factors this year will drive up labor costs for the restaurant industry. Companies will have to prepare for the delayed employer mandate of the Affordable Care Act and get ready to provide health insurance if they meet the 50 full-time employee threshold. Expect also to see a strong push for an increase in the federal minimum wage. President Obama declared his support in November for a $10.10 federal minimum wage, and the minimum wage will likely be a high profile issue for Congress in 2014, especially as the various increases in state minimum wages begin to take effect this year.
- Technology will become more integrated. This trend began in 2013, but will really take off in 2014. Tablets and mobile devices are changing the restaurant experience. These technologies can enable customers to make reservations and order food more conveniently, but can also be used by restaurant staff to help with tasks like seating tables. Look for more restaurants to copy chains like Chili’s, which installed tablets at tables in select restaurants and allows customers to pay at them.
- The healthy food trend will continue. Vegetarian, vegan, organic and gluten-free will continue to exert a strong influence on restaurant menus. In 2013, the number of restaurateurs whose inventory was greater than 50 percent organic more than doubled, and it will continue to increase in 2014. Likewise, 63.9 percent of restaurateurs surveyed are considering adding gluten-free items to their menu, whether that’s their first gluten-free item or additional options.
What trends do you expect to see in 2014? Contact Tommy Lee at firstname.lastname@example.org.