For months, we’ve been trying to articulate the general state of the restaurant industry and its consumers, and it’s all been a bit dizzying if we're being honest. To nutshell, operators were desperate for optimism in the latter part of 2022 as they continued to manage historically high inflation and labor shortages, and as nearly every crystal ball showed a recession manifesting at some point in 2023. At the same time, consumers were proving they really, really wanted to eat at restaurants after two years of not being able to consistently. The opportunities and the challenges were creating a weird balance.
During the Restaurant Development and Finance Conference in November, Austan Goolsbee, former chief economist with the Obama administration, summed up the macroeconomic environment as succinctly as anyone at that time, stating, “We’re confused.”
Fast forward nearly seven months and we’re still confused, frankly. Inflation and labor have started to ease a bit, which has helped operators. That said, they’re anxious about higher rent costs, higher wage rates, higher financing rates and lingering supply chain issues. There is also a new need for fast-paced technology they’re trying to understand – and afford.
Meanwhile, consumers remain a tough nut to crack and good luck trying to figure them out right now. What we do know is this: Consumers are largely employed and that means they have some disposable income, which is always good news for restaurants. They’ve shown their willingness to spend despite continued high menu prices, and it’s clear they still have significant pent-up demand for restaurant occasions.
But we also know they’re swimming in record levels of debt and they’re anxious about the perpetual news cycle reporting layoffs. They’ve also started to trade down a little bit, which is always a concern.
In other words, the environment and the outlook are mixed and the balance between opportunities and challenges is weird. Still.
We say that after sifting through dozens of earnings calls and transcripts and pouring through surveys and reports to better understand the state of the industry as it applies to consumers, as well as operators big and small. We anticipate, however, our understanding to become far clearer at the National Restaurant Association Show May 20-23 in Chicago as the event brings together more than 60,000 attendees, including 800 new manufacturers and suppliers (a 61% increase over 2022’s first-time exhibitor total).
From that attendee list, we’re hoping to talk to as many executives, operators, chefs, vendors, etc., as we possibly can within a four-day timespan and, from those conversations, we hope to come away with a better understanding of the industry as it looks from the trenches. We hope to learn as much as we can at as many sessions as we can. We hope to understand new tech and menu and equipment innovations and their potential to disrupt this massive space. We hope to network with friends old and new during each day and into the evenings. And, importantly, we hope to siphon as much optimism as we possibly can from this show and its attendees, because we are starting to feel the light at the end of this very long, strange, three-year tunnel. At least, we think we are? Looking forward to seeing you all this weekend! Nation’s Restaurant News will be at booth #1531.
Contact Alicia Kelso at [email protected]