America’s one million restaurants will continue to be a leading job creator in 2015, according to the National Restaurant Association’s 2015 Restaurant Industry Forecast released on January 27. While the operating environment will remain challenging, total restaurant industry sales are expected to reach a record $709.2 billion in 2015 – a 3.8 percent increase over 2014, marking the sixth consecutive year of real sales growth for the industry.

The year also will mark the 16th consecutive year in which restaurant industry employment will outpace overall employment growth. Restaurants will employ 14 million individuals this year as the nation’s second-largest private sector employer, representing about 10 percent of the total U.S. workforce.

“Our nation’s restaurants continue to be an essential part of Americans’ daily lives and play a vital role in every community across the country,” said Dawn Sweeney, President and CEO of the National Restaurant Association. “Although operators will continue to face a range of complex challenges in 2015, the restaurant and foodservice industry remains a fundamental driver of the nation’s economy, while providing valuable careers and opportunities to 14 million Americans.”

“With the economy slowly improving and national employment trending upward, signs are pointing in the right direction for restaurant industry growth,” said Hudson Riehle, Senior Vice President of Research for the National Restaurant Association. “Certain components of the business climate remain a challenge, accelerating industry sales in some regions and putting a damper on them in others, but the overall industry is definitely in a better place now than several years ago.”

Workforce Outlook

Eating and drinking places are expected to add jobs at a solid 3.2 percent rate in 2015, a full percentage point above the projected 2.2 percent gain in total U.S. employment.

Eating and drinking places added jobs at a solid 3.1 percent rate in 2014, outpacing total US employment which grew at 1.9 percent.

Restaurant industry employment will reach 15.7 million by 2025, an increase of 1.7 million positions during the 10-year period.

While every state is expected to see their restaurant industry workforce expand during the next decade, the top five states are: Arizona (23.8%), Florida (22.4%), Texas (22.0%), Georgia (21.1 %) and Utah (21.0%).

Challenges and Opportunities

Operators will continue to face a range of challenges, including food costs, building sales volume, the economy and recruiting and retaining employees.

Average wholesale food prices jumped more than 5 percent in 2014, which represented the fifth consecutive annual increase. During the last five years, average wholesale food prices rose roughly 25 percent. Operators can expect to get pricing relief on several of the major commodities in 2015, including dairy and pork.

With the economy steadily improving and the jobless rate trending downward, restaurant operators are finding that the competition for employees is intensifying.

Labor costs will remain a concern for operators in 2015. Challenges with Affordable Care Act implementation and minimum wage increases have made a significant impact on restaurant bottom lines, as typically one-third of restaurant sales is spent on labor.  

Consumers continue to have substantial pent-up demand for restaurant services: 38 percent of consumers say they are not eating on the premises of restaurants as frequently as they would like; 41 percent say they are not purchasing takeout or delivery as often as they would like.

Consumer Trends

Roughly one-quarter of consumers say technology options are important features that factor into their decision to choose a restaurant (up from the nearly one-fifth that said the same the year prior).

While restaurants are more rapidly starting to adopt various forms of consumer-facing technology, a gap remains between what consumers want and what restaurants currently offer. That gap is beginning to narrow and will further close over the next several years as restaurant technology evolves and more options enter the marketplace.

Despite increased consumer use of technology options, personal service will continue to be the hallmark of dining out. Consumers still want people as part of their restaurant experience, yet look to technology to increase service speed and convenience.

8 in 10 of consumers say restaurants offer more healthful menu options now compared to two years ago, and 76 percent say they are more likely to visit a restaurant that offers healthful options. In addition, 67 percent of consumers say they also order more healthful options in restaurants than they did two years ago.

Consumers are showing increased interest in local sourcing and more restaurants are taking notice, with more than 8 in 10 tableservice operators saying their guests are more interested in locally sourced items this year, compared with 7 in 10 that said the same a year earlier.