CHICAGO Technomic Inc. revised downward its 2009 foodservice sales projections last week because of further contraction in the U.S. economy, a continued slowdown in consumer spending and accelerated job losses.
The Chicago-based foodservice consulting firm said it now expects total foodservice sales to drop 2.2 percent this year, and when factoring in inflation, to fall 4.7 percent. In September, when the firm released its original industry outlook, it had expected sales to rise 1.7 percent on a nominal basis, or when not adjusted for inflation. Technomic had forecasted a drop of 2.7 percent when adjusted.
To account for easing commodity prices and restaurant operators’ growing reluctance to raise menu prices — two silver linings amid the economic storm — Technomic lowered its projected inflation rate from an original 4.5 percent to a revised 2.5 percent.
“Even if the economy were to improve quickly in the second half of 2009, real growth is expected to remain negative,” said Joe Pawlak, Technomic vice president.
The deepened sales dip reflects the worsened economic and industry performance since late last year, which included a weak holiday season. Technomic said it now expects 2009 to be the worst year for foodservice since it began tracking performance in 1972. Many major restaurant chains have reported that sales indeed dipped further in the final quarter of 2008, and many predict no signs of improvement through most of 2009.
Sales at full-service restaurants will be hardest hit, with an expected drop of 6 percent on a nominal basis and 8.5 percent when inflation is factored in. Originally, Technomic had forecast that the sector would post flat sales growth on a nominal basis and a 4.5-percent dip on a real basis.
At what Technomic calls limited-service restaurants, or quick-service locations, sales are expected to remain flat on a nominal basis and to drop 2.5 percent on a real basis. Back in September, the sector had been forecast to post a 3.0-percent nominal sales uptick, or a 1.5-percet real dip.
The latest data from the consulting firm did not provide revised sales tallies, but the newest percentage changes would indicate that foodservice sales in 2009 would total $502.16 billion, down from a revised 2008 total of $513.46 billion.
Contact Sarah E. Lockyer at [email protected].