Exclusive: Pent-Up Hunger for Dining Out

NRA's Hudson Riehle shares hopes for a larger pie

Abbie Westra, Director, Editorial, CSP

NRA's Hudson Riehle

OAK BROOK, Ill.-- Retail foodservice, which includes c-stores and supermarkets, will see a sales growth rate well above the industry average this year, according to data from the National Restaurant Association (NRA). In such a competitive market, you might be quick to wonder from whom these retailers will be stealing share. But the NRA’s Hudson Riehle believes there is still ample opportunity for consumers to shift more money into the industry.

“Our consumer research indicates there’s substantial pent-up demand for restaurant usage among consumers. Two out of every five adults report they’re not using restaurants as much as they’d like in their daily lives,” says Riehle, senior vice president, research & knowledge group, for NRA.

The number of actual meal periods that are commercially prepared out of the 21 in a week is about five. Even given that a few meals might be skipped, “That still leaves 14 at-home meal periods. From a foodservice provider perspective ... the challenge is to move the labor out of the home kitchen,” says Riehle.

At the same time, NRA has recently found an increase in consumer confidence levels, which Riehle expects will help move some of that pent-up money over from the home kitchen to the restaurant industry.

“The predisposition for customers to shift their dollars away from home is definitely there,” he says.

For its part, retail foodservice is giving these pent-up consumers just what they’re looking for. Improved quality and variety, convenience, value price points and simply more locations offering foodservice are the factors helping to boost consumer interest and satisfaction in retail foodservice. The fact that two-thirds of total restaurant traffic is off-premises further props up retail foodservice to fill consumers’ needs.

Retail host restaurants -- how the NRA categorizes c-stores, supermarkets and other retailers -- will post sales in excess of $35 billion this year, nearly a 6% increase over 2011 levels and well above the industry average. By comparison, QSRs are expected to see a 3.1% increase.

Regardless of whether a particular segment is up or down this year, says Riehle, nothing beats a well-thought-out, well-executed business plan.

“One of the hallmarks and great success attributes of the restaurant industry is its extreme flexibility and the rapidity with which it can respond to consumers’ wants and needs,” he says. “Obviously c-store operators are much more cognizant of the potential of foodservice and that it is a different type of operation vs. their traditional retail offerings.”

In 2012, total restaurant industry sales nationwide are expected to reach a record high of $632 billion, up 3.5% over 2011 and the third consecutive year of sales growth.

“The growth rates aren’t what they were prior to the onset of the recession,” says Riehle, “but the trend is definitely moving in the right direction.”

Abbie Westra, CSP/Winsight By Abbie Westra, Director, Editorial, CSP
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