KANSAS CITY — Optimism among foodservice operators is rising even as uncertainty continues to cloud the nation’s economic outlook. The National Restaurant Association (NRA) forecast restaurant sales in 2023 may reach $997 billion, up 11% from the association’s estimate of 2022 sales, at $898 billion. Supporting the outlook is a return to normalcy as the impact of the COVID-19 pandemic fades, supply chain disruptions ease and labor tightness becomes less acute.
Restaurant operator optimism remained elevated in February, according to the NRA’s monthly Restaurant Performance Index (RPI), which stood at 102.7, down slightly from a level of 102.8 in January. The RPI is designed to measure the overall health of the US restaurant industry. Index values above 100 indicate key industry indicators are in a period of expansion, according to the NRA.
The RPI features two components — the Current Situation Index that measures current restaurant industry trends and the Expectation Index that measures restaurant operators’ six-month outlook. In February, the Current Situation Index stood at 103, unchanged from January, and the Expectations Index ticked down to 102.4 in February from 102.5 in January.
Restaurant operators reported same-store sales and customer traffic levels above year-ago comparisons. Looking ahead, 60% of restaurant operators surveyed said they expect to have higher sales in six months — the highest proportion in a year, according to the RPI.
Preliminary data from the US Census Bureau supports the buoyed spirits of restaurant operators. Total eating and drinking place sales in January and February combined were more than 19% above the first two months of 2022.
Food and beverage manufacturers are taking note. The Kraft Heinz Co. has identified foodservice as a growth opportunity. During a Feb. 15 conference call with securities analysts, Miguel Patricio, chairman and chief executive officer, called foodservice an attractive channel for the company, and Carlos A. Abrams-Rivera, president of North America, added that Kraft Heinz is only in 25 of the top 50 quick-service restaurant chains in the United States. At around the same time Post Holdings, Inc. reported that foodservice category performance exceeded expectations, which prompted the company to raise its outlook for the year.
There are, however, clouds on the horizon. Coinciding with an uptick in sales during the first two months of the year, the NRA measure of pent-up demand edged lower. Forty-one percent of adults said they are not going out to restaurants as often as they would like, according to a survey fielded March 10-12. That was the lowest level reported since before the pandemic. Thirty-three percent of adults said they are not ordering takeout or delivery from restaurants as often as they would like. That was essentially even with consumers’ reporting in surveys fielded in May 2022 and September 2022.
Taken together, the NRA’s overall industry sales projection, the RPI and pent-up demand survey point to a welcome return to normalcy. There is always uncertainty and volatility in any business, and foodservice is not an exception. But a positive takeaway is the forces buffeting the category are measurable and, to some extent, predictable, which is welcome after the past three years.