Hudson Riehle and Nicole Valenti presented a seminar on the results of a recently NRA commissioned survey on current trends. The current economic environment is the most challenging in the careers of all current operators. No one has experience with tsunami shifts that have occurred over the past two years. There will be permanent displacements and lasting changes from learned habits necessary for surviving this environment. Menu price inflation has climbed unabated for several years and the industry is changing by adding new foodstuffs which are coming online and many of those are taking root.
Higher income households have had their balance sheets under stress during this period and that has contracted the disposable personal income available which has put considerable pressure on restaurant spending. The number one way that operators are managing costs is by cutting or redeploying labor. This is in striking difference to the study two years which listed recruiting and retaining labor as the major challenge.
There were two things that were really confusing to me, 1) Of the three hundred seats available, barely a third were occupied. NRA has incredible resources which are not being utilized fully by its members. 2) 45% of respondents did not believe the credit crisis effected their business. Cash is still king in the restaurant business.
The RPI Index has turned ever so slightly upward and operator outlook has improved. Key to future upturn is the belief that 90% of adults enjoy eating out at restaurants.
