National Restaurant Association's 2019 State of the Industry Report

A competitive business environment. While restaurant operators generally are optimistic about business conditions, they don't expect a letdown in competitive pressures in 2019. In addition, rising labor costs and a complex legislative and regulatory landscape on federal, state and local levels add pressure on business performance and bottom lines.

Staffing is a top challenge. The prolonged economic expansion has led to a tighter labor market for business in many industries, but the restaurant industry also continues to be impacted by longer-term structural changes in the labor force. As a result, recruiting and retaining employees will be among the top challenges faced by restaurant operators in 2019.

Pent-up demand remains elevated. Consumer confidence is strong, their balance sheet is sound, and higher-income households represent a larger share of households than ever before. With consumers’ pent-up demand for restaurant services remaining elevated compared to historical levels, well-positioned operators can still boost traffic in a competitive environment.

Technology incorporation continues. Technology adoption will keep growing among restaurant operators in 2019, but the trends are not uniform across segments. Consumers would most like to see restaurants incorporate technology that focuses on improving customer service, making ordering and payment easier, and offering more convenient takeout and delivery options.

Food preferences continue their rapid evolution. Contemporary consumer cravings are dovetailing with emerging societal dining trends. Among the trends for 2019: a more eco-friendly perspective, greater emphasis on global flavors/cuisines, enhanced availability of healthful items and healthful children’s meals, and the exploration of new food sourcing options.

-----

2019 SALES & ECONOMIC FORECAST Industry sales projected to reach $863 billion.

Driven by an expanding economy and elevated consumer sentiment, the restaurant industry is expected to register  positive sales growth  in 2019 — growing to $863 billion in 2019.

Although economic growth is expected to slow somewhat in 2019, consumers remain generally  upbeat about their personal finances.  This confidence, along with a healthy household balance sheet, should lead to additional consumer spending.

Measures of  business sentiment are decidedly positive , which typically buoys confidence for additional hiring. As long as the potential downside risks of higher interest rates and trade skirmishes remain subdued, the expectation is that business conditions will be positive in 2019.

Included in the 2019 State of the Restaurant Industry:  Sales projections  for various restaurant industry segments … Dashboards on the state of the American economy and American consumer … the 2019 outlook on  energy prices  and  food costs  … trends in  menu price growth  … and the outlook for tourism in 2019.

​-----

TABLESERVICE & LIMITED-SERVICE RESTAURANT TRENDS Off-premises options could provide competitive edge.

While restaurant operators are generally optimistic about business, they  don’t expect a letdown  in competitive pressures. The vast majority of operators say they think competition from other restaurants will hold steady or become even more intense in 2019 than it was in 2018.

Although on-premises traffic still represents the majority of business in the tableservice segment, the  growing demand among consumers will make off-premises options important drivers  across the industry in 2019. Successful operators will focus on the daypart that works best for their segment.

Restaurant operators across all segments will focus on  building business among younger consumers  in the years ahead. To attract these tech-savvy consumers, a majority of operators expect to devote more resources to both social-media marketing and electronic marketing in 2019.

Included: Snapshots of  takeout, delivery and catering trends  … opportunities and trends in the  breakfast, lunch and dinner dayparts.

-----

WORKFORCE TRENDS Recruiting and retaining employees a top challenge for 2019.

With total restaurant and foodservice employment projected to top  15 million  in 2019, recruiting and retaining employees will be among the top challenges faced by many operators. More than a third of operators have job openings that are difficult to fill, with the biggest challenge finding applicants for back-of-the-house positions.

The prolonged economic expansion has led to a tighter labor market for businesses in many industries, but the restaurant industry also continues to be  impacted by longer-term structural changes  in the labor force. The recent uptick in teenage restaurant employment may be short-lived, with long-term projections calling for a shrinking teen labor force in the years ahead.

The restaurant industry continues its role as a  training ground for new entrants  to the workforce and a  place for upward mobility . Half of limited-service restaurant job openings and four in 10 tableservice restaurant job openings in 2018 were filled by either new entrants to the workforce or people promoted from other positions within the same restaurant.

Bonus: Get the outlook for  job growth for many restaurant occupations  over the next decade, along with projected  restaurant job growth by state  and the latest data on  hospitality-sector turnover.

-----

TECHNOLOGY TRENDS Restaurants tap technology to boost business.

Restaurant operators are planning to ramp up their investments in technology in 2019, with the most common focus being  customer-facing service-based technology , such as online or app ordering, reservations, mobile payment, or delivery management.

While most consumers currently use some amount of technology in their restaurant experience, there is an  appetite for even more  advancements. A majority of consumers say they would like to see restaurants incorporate more technology with a focus on improving customer service, making ordering and payment easier, and offering more convenient takeout and delivery options.

Emerging technologies that rate highest among consumers include  service-enhancing items  such as  tablets at the table ,  self-service electronic kiosks , and  wearable technology  for restaurant servers

-----

FOOD & MENU TRENDS Clean and green.

Chefs predict that restaurant food and menu offerings in 2019 will be influenced by  zero-waste cooking ,  hyper-local sourcing ,  veggie-forward cuisine  and  natural ingredients.

Local sourcing, healthy options,  and  eco-friendly  food are increasingly important to consumers, and a majority of them say the availability of these options factors directly into their choice of a restaurant.

A majority of adults say they are spending more time at home watching on-demand television and videos. At the same time, they expressed an interest in  purchasing quality food and ingredients  from their favorite restaurant, with instructions on how to cook a meal at home.

-----

ABOUT THIS REPORT The National Restaurant Association each year prepares a comprehensive overview of and outlook for the restaurant industry. The Association's research is considered the most authoritative source for restaurant industry sales projections and trends. It is based on analysis of the latest economic data and extensive surveys of restaurant operators and consumers. The Association's research and analysis have a longstanding reputation of the highest credibility, neutrality and accuracy inside and outside the industry.

The 2019 State of the Restaurant Industry is available for $349, or as a complimentary benefit for members of the National Restaurant Association.  Learn more about membership .

Download the report!