Consumer Trends and Expectations in a Shaky Economy

While the restaurant industry continues to show upward trends in 2012, 8 out of 10 consumers say they have been forced to cut back on eating out during the worst of the recession. This is no surprise – with the millions of jobs lost throughout the nation, eating out becomes part of the “unnecessary expenditures” column of many family budgets.  Customers are expecting low, competitive pricing with fresh and quality ingredients. Local sourcing is a selling point.  

There’s no doubt about it, American families are certainly watching their spending habits more closely, and many have been forced to cut back significantly.  This is the reason why the Fast Casual model has proven to be so strong in the past few years despite tough economic times – consumers are watching their spending lately but that doesn’t necessary mean they aren’t eating out.  And many fine dining establishments with pricier fare are still going strong due to continued customer loyalty and word of mouth referrals, which has proven to be a restaurant’s number one asset for building a thriving customer base in any economy – good or bad.  

What it all comes down to is in order to attract business and maintain a successful, thriving establishment, restaurants will need to provide the best in customer care, food quality, and service so that customers will be more inclined to tell their friends, co-workers, and family members about their experience.  Customer experience can often be as important as price, and both should be kept in consideration.  

Also, with trends toward locally grown produce and nutritional menus, customers are becoming more inclined to care about the source of their food and to frequent establishments that support local farmers.  Additionally, families are concerned about a restaurant’s offering of nutritional choices for children, as well as vegetarian and vegan selections to satisfy diverse palates, preferences, and diets.  

In general, consumers are concerned about eating healthier when dining out.  According to the National Restaurant Association’s 2012 Industry Forecast, nearly three-quarters of consumers prefer restaurants that use locally grown food and that same number say they eat healthier now than they did two years ago.     

Rising Costs Mean More Technology-Based Service

Many small business owners are still anxiously watching the nation’s economy to see how 2012 will shape up to be different than the last 5 years and if job loss will slow across all sectors – particularly within the restaurant industry.  Rising fuel prices are still a growing concern across all sectors that involve transportation of goods, and especially within the restaurant industry, which relies heavily on shipped products from both national and international sources.  

In an effort to cut costs and reduce spending to make up for rising fuel prices and cautious consumer spending, restaurants are seeking ways to maintain the excellent levels of customer service their customers expect with fewer staff members.  Many are finding that the best way to do this is by using technology that can streamline business operations and be an interface between the customer and the staff members, or a marketing tool.  For business operations, an example might be a client database for consistent customer contact to maintain loyalty and advertise daily specials, coupons, or events.  Other examples might be online table reservations or smartphone aps that assist in scheduling.  

Due to this growing demand for technological innovation, technology is fast becoming part of a successful restaurant’s business structure, particularly for maintaining communication with customers.  With recent trends in social networking and smartphones, restaurant owners are meeting the needs of customers with daily specials via text message and smartphone aps with menu and online ordering for home delivery.  

The National Restaurant Association’s 2012 Restaurant Industry Forecast showed consumers are interested in the services that could be provided within the restaurant, such as ordering at the table via electronic menus or using in-store kiosks. The Forecast also stated that there is significant consumer interest in ordering online, ordering via smartphone aps, and looking at online menus. 

What are successful restaurants doing to maintain clients?

Rising Prices of Wholesale Goods Create a Challenge for Restaurant Owners

Early outlooks are seeing a steady rise in consumer spending and stabilizing of job loss, with job growth nationwide and across sectors being at a slow 1.1%.  The restaurant industry is growing over double this rate, so projections are strong that it will continue to grow and return to its pre-recession employment numbers by the end of the year.  This is great news for anyone who is skilled in the restaurant industry, as well as a benefit for managers and owners who are looking for a broad and competitive candidate pool of qualified applicants who are ready and anxious to work.  

The National Restaurant Association’s 2012 Restaurant Industry Forecast maintained a glowing outlook for the upcoming year for restaurants and for job growth in the restaurant industry.  As the economy is getting back on its feet, consumers are dining out more and the demand is there. However, despite expected gains in sales and employee numbers, there will certainly be challenges facing the industry as we move forward into 2012 and its still-uncertain economic outcome among other sectors.  

The greatest challenge noted by the Association’s forecast was the cost of food and beverages purchases and the rising prices of wholesale goods.  The cost of oil and transportation are continuing to rise, causing strain on restaurants that rely heavily on foods that are shipped in or imported from other countries.  

Even though consumers are dining out more, they are still pinching pennies to budget during the recession (or what’s left of it). Pricing is an even greater concern than ever before if a restaurant intends to fill its tables each evening.  Selling points are quality fare that is healthy, fresh, and locally grown – at reasonable prices that are comfortable for a variety of budgets.

Is the restaurant industry recovering from the recent recession?

2012 will be a Year of Growth for the Restaurant Industry

In February, the National Restaurant Association’s 2012 Restaurant Industry Forecast released its projections for the upcoming year. The good news is that 2012 will hold steady gains – both in profits and in jobs – for the restaurant and food service industries.  In consideration of a still-lagging economy, the forecast was even better than what was expected among those in the industry who weren’t sure if we had seen the worst of the downturn, with a 3.5 percent increase over the 2011 numbers.  2012’s projected $632 billion dollars in sales gives everyone in the business a positive outlook regarding the year ahead, particularly if you offer locally grown ingredients on your menu.  

Additionally, as concerns of job loss still weigh heavily on the minds of most Americans, it’s good to know that the restaurant industry will continue to remain the second largest private sector employer.  The food services and restaurant industries also beat out other private sector industries in adding jobs and gaining back the staffing numbers that were lost during the worst of the recession. In fact, it is projected that by the end of 2012, the restaurant industry will have gained back all of the employees that it lost since 2008 and the beginning of the recession.   

  

The National Restaurant Association also anticipates that within the next decade, there will be 1.4 million jobs added to the positions currently held, making the restaurant industry workforce one of the nation’s largest, at 14.3 million people. What this means is that businesses currently in the restaurant industry have an excellent opportunity to take advantage of a year of projected growth, and a job market with many candidates who are anxious and qualified to work.  

Ensuring that your restaurant’s structure is set up to handle this kind of growth is crucial forward thinking in a time when the industry is set to expand rapidly to meet the growing demand for quality food that focuses on nutritional value and the local economy.  Keeping in touch with your base clientele is essential, as is establishing and maintaining a network of loyal customers who will return to your tables often, bringing friends and relatives with them.