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NRA Projects Slower Sales Growth In '08

Posted On: 1/12/2008

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, DC -- Foodservice sales in the United States will slow in 2008 to a modest 4.4%, or 0.9% adjusted for inflation, according to the National Restaurant Association's recently released 2008 Restaurant Industry Forecast. Despite the slowdown, the industry is on track to achieve its 17th year of consecutive growth; the NRA forecasts $558 billion in sales in 2008, compared with $536.9 billion this year.

Segments expected to post the largest sales gains in the coming year are snack and nonalcoholic beverage bars (which include specialty coffee shops) and social caterers, with 6.8% and 6.6% projected growth, respectively. Quickservice restaurants are forecast to see a 4.4% sales increase, and sales at full-service restaurants are projected to climb 4.3%.

With sales and job growth anticipated in all 50 states, Nevada is again expected to post the fastest sales growth at 6.5% in 2008, followed closely by Arizona, Utah, Texas and Colorado.

The restaurant industry faced the largest spike in wholesale food prices in 27 years in 2007, as well as increasing energy and gas prices. While softening somewhat going into 2008, NRA anticipates these prices will remain elevated, taking a toll on industry profitability.

According to the association, Americans are hungry for new experiences, easy-access solutions and variety, and in 2008 foodservice providers will offer diners a wider variety than ever of menu choices and flavors, technology solutions and takeout and delivery options to fit into their lifestyles.

NRA surveyed more than 1,000 professional chefs for its industry forecast and found that small plates, also known as tapas and mezze, and bite-size desserts are topping the list of trends. Other hot food trends include alternative-source ingredients (locally grown produce, organics, sustainable seafood, grass-fed and free-range items) and ethnic cuisines, flavors and ingredients.

In quickservice restaurants, wraps, pitas and tortillas are at the top of the list of foods gaining popularity, and entrée salads, chicken sandwiches and breakfast sandwiches also are on the rise. On the beverage menu, energy drinks and espresso/specialty coffees are among the most popular items.

With increased consumer emphasis on health, restaurants are responding to trends with nutritious options and variety in portioned sizes. More than three-quarters of American adults (76%) say they are trying to eat more healthfully in restaurants now than they did two years ago, and 73% of teenagers (ages 12-17) endeavor to eat nutritiously when dining out. Eighty-seven percent of adults say there are more healthy options available at tableservice restaurants than there were two years ago, and 83% say the same about quickservice establishments.

With 62% of consumers surveyed reporting that they are likely to choose a restaurant based on how environmentally friendly it is, restaurants are responding through water- and energy-saving equipment, low-energy light bulbs and procurement of supplies and packaging made of recycled or alternative materials. A smaller proportion of restaurants are taking their eco-commitment to menus as well, with organics, and sustainable seafood and meats.

From curbside to cyberspace, operators are also delivering more choice to their customers when it comes to takeout, curbside pickup, drive-through, catering and delivery options. And guests welcome these options, with 47% of adults saying they would use curbside takeout if offered by their favorite tableservice restaurant, and 54% saying they would use delivery if offered.

Also a growing consumer trend is interest in more options to place orders, including online, by fax or via cellphone. While only a small percentage of restaurants currently offer electronic ordering, 44% of consumers said they would be likely to use such a system. In quickservice restaurants, 57% of consumers who have not used a self-serve ordering terminal say they would if it was offered.

The National Restaurant Association is online at