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New reports from different restaurant advisor sources point to the economy having an impact on consumer spending along with product costs that are on the rise next year. With economic uncertainty and high unemployment still at the forefront, it is not surprising that consumers will curb their eating out expenditures along with other discretionary spending. At the same time restaurant owners and operators will face increases in product costs of at least 5%. According to the Harris Poll survey, “which polled 2,499 adults in November, found that 61 percent of respondents said they are likely to decrease their spending at restaurants. “As the economy fluctuates and Americans continue to feel pessimistic about employment prospects, it only follows that nonessential spending would continue to be scrutinized.” Read more on this restaurant advisor outlook here. In a separate report, food and beverage costs are predicted to rise more than 5% in 2012. According to the Fitch Ratings and something to factor in with pricing and restaurant planning: “Fitch predicts food inflation pressure to be driven in particular by rising protein prices. The latest USDA commodity price forecast calls for 2012 beef and chicken prices to increase by 9 percent and 5 percent, respectively, following a year of double-digit price increases for many food items in 2011.” The takeaway here is that restaurant and foodservice businesses may be forced to raise prices while consumers are cutting back. Coupons and discounts, although still prevalent among large chains, may start to disappear with smaller, local eateries. These establishments will be forced to use more creative restaurant marketing ideas to attract customers while maintaining prices high enough to offset their diminishing bottom lines. Are you an owner and operator of an independent local restaurant? How are you coping with higher food and beverage costs and less consumer spending if any? Please share your comments with this restaurant advisor and others here.
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