2019 Restaurant Outlook
The restaurant industry outlook for 2019 is moderate with a steady growth in sales, as has been true for the past decade. According to the U.S. Bureau of Economic Analysis, the U.S.’s gross domestic product increased by 3.4% in the third quarter of 2018. However, consumers still have less money to spend on food. Expenses are high and wages are stagnating.
The good news is, they still spend about half of their food budget on restaurant food. The bad news is that restaurants are having to compete more and more to serve consumer needs. With innovation, nonetheless, restaurants might have a shot at winning consumers over and increasing their profits by a considerable margin.
Food Delivery Services
Unfortunately, consumers are trending towards convenience over a dining-out experience. Instead of leaving home to pick up food themselves, the convenience of delivery is holding their interest.
Third-party delivery services, such as the ubiquitous Uber Eats and GrubHub, are keeping in with the times. Analyzing user data and trends, they are focusing on innovating with restaurants in the creation of “ghost restaurants”.
Ghost restaurants are a means of matching consumers with the foods they were craving but weren’t finding through traditional brick-and-mortar restaurant searches. This means partnerships with traditional restaurants that already have the infrastructure in place to cook the foods sold by these virtual restaurants.
In exchange, restaurants experience a significant uptick in sales. Betsy Levya, owner of the Brooklyn bakery La Gran Via Bakery, was approached with the idea by Uber Eats and reacted with suspicion at first. However, soon after setting up her hamburger side business, she told NPR, “We’ve increased our sales by about 30 percent. So it’s very exciting.”
Though Uber Eats takes a mighty chunk of the profits through fees to restaurants and consumers alike, the boost in revenue is not to be ignored.
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Meal Kit Delivery Services
A massive boom in competition has been the introduction of meal kit delivery services. This is especially true since 90% of adults still prefer home-cooking to dining-out.
According to Chick-fil-A, however, this boom might be a way to innovate and increase restaurant profits.
They’re currently experimenting with meal kits sold at 150 of their locations. Customers can pick up a chicken-based meal immediately, along with their usual fast-food dining, rather than invest in a meal a week in advance. Combining immediacy with familiar ingredients and lower prices just might win out the day.
Innovation Is Within Your Reach
Looking to increase your sales revenue for 2019? Contact TRG today to get a head start on the competition.