(June 6, 3:48 p.m.) If the American consumer sneezes, the U.S. restaurant industry catches a cold.

Now that many consumers are hacking and wheezing from rising fuel costs, a slumping economy and rising costs of food, the foodservice operators — like many Americans — are looking that their future less optimistically.

A USA Today/Gallup Poll of consumers conducted from May 30 to June 1 revealed that 55% of those surveyed said they were worse off compared with a year ago, compared with only 26% who reported they were better off economically.

A mid-May Qunnipiac University poll of more than 1,700 people nationwide revealed rising gasoline prices as the top economic issue, cited by 47% of those polled. Rising food prices was the top worry of 16% of those responding.

About 48 cents of the consumer food dollar goes to away from home eating, according to the Washington, D.C.-based National Restaurant Association.

The sales of fresh produce to foodservice relative to supermarket sales nearly match that ratio.

In 2006, foodservice operators bought $44.2 billion worth of fresh produce, according to the U.S. Department of Agriculture Economic Research Service. That compares with the ERS estimate of $56.3 billion in retail fresh produce sales that year.


A NRA survey of restaurant operators in April showed that there are plenty of question marks about the future.

In April, the NRA said 34% of restaurant operators expect their sales volumes in six months to be lower compared with the previous year; 29% anticipated higher sales.

The NRA reported 50% of operators reported a same-store sales decline in April.

Only 14% of operators expect improving economic condition in six months, compared with 42% who said they expect a worsening economy.

In the context of a slowing economy, the NRA reported rising food costs are another blow to their bottom line.

On a year-to-date basis, the NRA said wholesale price of food in March 2008 jumped 8.5%, following a 2007 wholesale food price increase of 7.6%.

Menu prices have increased, but not enough to keep up with wholesale food inflation, the NRA said.

In the 12-month period ending in January, menu prices rose 3.9%, well below the 5.8% rise in supermarket food prices for the same period.


Foodservice performance is hurting more than supermarket sales from the weak economy, fresh produce marketers said in early June.

“I would say our restaurant guys are slower; people still have to eat but the cheapest way to get it done is to eat at home,” said Mike Regan, vice president of Regan Distributing Inc., Los Angeles.

He noted the lower-end foodservice outlets are doing fairly well, while mid- to upper-range restaurants are suffering more.

Ron Skinner, director of sales for Idaho Fresh Produce Inc., Idaho Falls, Ida., said both foodservice and retail customers were driving strong potato demand and rising prices in early June.

However, Tony DiMare, vice president of the DiMare Co., Homestead, Fla., said economic factors seem to be causing sales to sag in foodservice outlets. He said there may be little relief in the immediate future.

“There isn’t much left in the consumer’s pocket at the end of the week to go out to eat,” he said.

The economy and other demographic trends are affecting consumer behavior in significant ways, said Tim York, president of Markon Cooperative Inc., Salinas, Calif.

“For the first time in 31 years, consumers are consuming fewer meals outside the home,” York said. “That’s pretty remarkable in itself.”

He noted that the research firm Technomic Inc., based in Chicago, forecast foodservice consumer sales this year will be up just 2.2% — even without adjusting for inflation.

“If you take inflation out, you will see reduced sales at foodservice for the first time in 31 years,” he said.

Beyond high fuel prices, York said a number of factors are gnawing at foodservice demand.

Aging baby boomers are expected to eat out less than they did in their younger years, he said.

“When you look at eating patterns outside the home, it is much higher as you are younger,” he said.

Other factors may be a renewed interest in cooking, and the perception that it may be healthier eating a home, he said.

Another woe for restaurant operators is too many outlets chasing consumers’ dollars.

“Since 1990 the number of restaurants has grown by 45% while the population has grown by 20%,” he said. “Much as we have planted too much lettuce, we have probably planted too many restaurants.”

Despite the overall economy and the slumping foodservice demand, York said Markon continues to grow at double-digit rates.