The National Restaurant Association recently released a performance index showing an increase in in food sales between the months of September and November.
This positive trend has led industry experts to speculate that 1st quarter 2018 earnings will continue to increase, which has brought much-needed relief to many restaurant owners who had experienced little to no growth over the past few years.
The recent boom in restaurants rose out of the ashes of an industry that had completely stagnated. Between 2015 and 2016, independent business operations decreased 3%. This number represented the closure of 9,309 independently owned restaurants.
Of the restaurants that closed, many were concentrated in the full-service segment. This includes casual dining, family dining, and fine dining. Full-service independent units were down 3%, and quick service independent units fell by 2%.
“The decline in U.S. restaurant units overall is a reflection of the industry’s stalled traffic growth,” said Greg Starzynski, Director of Product Management for NPD Foodservice. “Our forecast finds that U.S. foodservice visit growth will be less than 1% in the coming years, which means there will not be significant unit expansion for a while.”
In the wake of this stagnation, many restaurant owners wondered if the industry would ever gain momentum again. 2017 turned out to be a year of growth for many independent restaurants. 48% of restaurants reported higher same-store sales, and 46% said they expect to have higher sales in six months compared to the previous year. With restaurant futures on the rise, many restaurateurs have rallied to prepare for the upcoming growth.
According to a report, “a majority of restaurant operators are planning for capital expenditures in the coming months. 60% of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling.”