Free Download
The Voice of the Underdog®
Chapter 1
Nobody needs to remind restaurant marketers about the dark days of 2009. Selling discretionary products and services is challenging in the best of times, but when the economy slows dining out is one of the first luxuries to go. We saw the tremendous toll the Great Recession exacted on the entire restaurant industry and the casual dining segment in particular. But, the skies have cleared and industry sales are rolling again with projections showing a boost of 3.7 percent this year over 2014. But this means a bump in sales of 3.7 percent is simply treading water. Strong operators should be looking for a much healthier gain than that, and 2015 offers perfect conditions for those who are properly prepared to seize the moment.
1. People are eating out more. Just over 50 percent of all meals were eaten away from home in 2013, which set an all-time record, according to the USDA’s Economic Research Service. The previous record of 47.1 percent was set in 2007, but the recession had erased that success by the end of 2008. The industry didn’t see pre-recession levels again for five long years. Today, the tide has risen enough to lift all seaworthy boats. If your comp sales haven’t been pacing with positive national sales trends of the last few years something is amiss. Why are people eating out more? The USDA says, “Two-earner households and busier lifestyles have led consumers to spend less time cooking and seek the convenience of food prepared away from home.” And, that leads us to the second trend.
2. Household income is rising. We’ve all heard about the widening income disparity in the United States, but those reports have overshadowed some good news for average earners; median household income was up 3.3 percent in December 2014. That was a $738 jump over November, landing median household income at $54,417, according to Sentier Research. While this was good news, the last reporting period still shows American’s earning slightly less than they did in June of 2009. Still, income for average Americans is rising and that generates additional discretionary income.
3. Gasoline prices will stay low. We’ve all enjoyed the holiday from high gas prices, and the consensus view is low pump prices will hold through 2015. As a result, Americans will save roughly $1,000 at the pump this year. Presidents make a big deal of the economic impact tax breaks half that amount generate. For the average Jane and Joe, this is a very big break and it means more spending money, because as a rule Americans simply don’t save much of their income. According to the Bureau of Labor Statistics, the average American spends about $2,500 eating each year. Restaurant marketers should see that number rise in 2015, filling seats across all dayparts.
4. The weather’s nice. For most regions of the country, the long-range weather forecast calls for warmer, dryer conditions. This is always good news for restaurateurs. Rain, snow and generally cold conditions favor pizza delivery, but the balance of the restaurant industry suffers when the weather’s unpleasant. Good weather means good business.
It may be awhile before restaurant marketers have this much wind at their backs again. Take full advantage of these favorable conditions because we all know they can and will change quickly and without much notice. There’s no time like now for growth.
Share with friends
