ST. HELENA, Calif. â The past year felt like one of the longest ever for foodservice businesses, and one most werenât sad to leave behind. Even though they feel theyâve waited long enough for an economic recovery, predictions are that theyâll be waiting a little bit longer.
But so far, the new yearâs bringing more of the same, and in some instances, worse results, as multiple restaurant chains have already filed for Chapter 11 bankruptcy.
Once the new year got going, research firm Technomic Inc., Chicago, issued a revised 2010 restaurant industry forecast, adjusting it downward on Jan. 25. The firm cited concern over job losses, underemployment and continued consumer frugality in dining away from home as its primary reasons for its prediction of a 1.6% industry decline in 2010.
Dawn Sweeney, chief executive officer and president of the Washington, D.C.-based National Restaurant Association, addresses the audience of the Culinary Institute of America's Produce First!
Quick service, business dining and vending segments were already showing weaker than anticipated sales, prompting the downward adjustment, according to a Technomic news release.
The week before the adjusted release, Boston-based Uno Restaurant Holdings Corp., owner of Chicago Unoâs restaurants, and Seattle-based Taco Del Mar Franchising Corp., filed for Chapter 11 bankruptcy.
Earlier in January, 69-unit Daphneâs Greek Cafe, San Diego, did the same.
âThis is not a concept problem, itâs a balance sheet problem,â said Chris Gratto, vice president of food and beverage for Uno Chicago Grill, at the Culinary Institute of Americaâs Worlds of Healthy Flavors conference on Jan. 22.
Given current dynamics among consumers, Technomic doesnât see the industry return-ing to the sales level it previously enjoyed until 2011 or even early 2012, said David Henkes, Technomic vice president, in the release.
âWith demand remaining weak and bundled deals and promotions driving down check averages, topline sales growth among foodservice operators wonât bounce back quickly,â Henkes said.
The Washington, D.C.-based National Restaurant Association is predicting a gradual improvement in foodservice business in 2010 compared to previous years, but flat real growth. The association is predicting industry sales of $580 billion in 2010, which would be a 2.5% increase in current dollars, but essentially flat growth with adjusted for inflation, according to a news release.
In 2008 and 2009, however, the industry saw negative growth, so flat would be an improvement. The association is also predicting quick-service restaurants will fare better than full-service, as consumers still focus on value.
The segments Technomic expects to outperform the industry at large are education, supermarket foodservice and healthcare, a few segments that have already been seeing the bright side of the recession.