NRA increases restaurant sales forecast for 2021 to $ 789 billion

Dive brief:

  • The National Restaurant Association predicts that restaurant and foodservice industry sales for 2021 will total $ 789 billion, according to the organization’s report. Semi-annual report on the state of the restaurant industry published Tuesday. The association previously forecast sales to reach $ 731 billion in a report it came out earlier this year.
  • Citing the increase in consumer spending that has led consumers to order takeout more frequently and increase their site visits, the NRA has raised its sales forecast for food outlets from $ 548 billion to $ 609 billion. of dollars. This includes increased sales forecasts for the full service and limited service segments, as well as bars and taverns.
  • While estimated total sales in the industry are 19.7% higher than the 2020 figures, sales are still more than 8% lower than 2019 sales. Restaurants also continue to face labor challenges. work and supply chain, increasing wholesale food costs and changes in diners behavior as delta-variant COVID-19 cases increase in the United States

Dive overview:

Demand for restaurants is still strong, albeit slightly declining, which bodes well for the continued recovery of restaurants. In April 2020, 83% of adults said they wanted to dine more often, while 52% said they wanted to order takeout or delivery more frequently. Those numbers fell to 50% for on-site meals and 28% for take-out / delivery in June, according to the report.

However, the demand for on-site dining is still higher than pre-pandemic levels, with 45% of adults saying they wanted to eat on-site more often in January 2020. This is a good sign of continued demand. consumers even in the case of the delta variant rises across the country.

“We expect pent-up restaurant demand to remain high over the next several months,” said Hudson Riehle, senior vice president of research for the National Restaurant Association, in a press release. “However, in this state of flux, maintaining on-site meal availability with few capacity restrictions will be critical to sustaining overall sales momentum, especially for full-service operators.”

Even though 19% of diners said they had stopped dining out due to coronavirus fears, operators’ biggest concerns remain recruitment and retention. Seventy-five percent of restaurateurs said these were their top challenges in July, the highest level in nearly 20 years that the NRA facilitated this survey. Comparatively, in January 2020, 49% of operators said recruiting and retention was their biggest challenge. The industry still has around 1 million employees timid to hit its pre-pandemic numbers, but continues to face high turnover rates, especially amid growing employee concerns about safety, the burnout and harassment of clients.

Restaurants also increased menu prices 3.9% in June 2021, the largest annual price increase in 13 years, according to the United States Bureau of Labor Statistics cited in the report. Prices have risen largely due to rising labor and food costs – wholesale food prices have increased at their fastest rate in seven years, according to the report.

Maintaining operations amid changing regulations is also an ongoing challenge for restaurants. McDonald’s has recommended its franchisees to close dining rooms in areas with high coronavirus cases. Cities are also increasingly demanding proof of vaccination or mask warrants for indoor meals, again forcing operators to enforce coronavirus policies.

While the environment will remain difficult for a while, restaurants have bright spots ahead. Take-out alcohol has become permanent in 17 states, including Washington, DC, which can help increase off-premises sales by 5% to 10%, according to the report. Offsite usage across all three times of the day remains high and outdoor dining usage in industry remains high at 57% of usage in April, and 84% of consumers said they were in favor of restaurants which set up tables on sidewalks, parking lots or streets permanently.

Comments are closed.