Technomic Forecasts Improving Operator Sales Into 2013

Technomic Inc., the Chicago-based foodservice research firm, often revises its current-year forecast of operator sales around the time of the National Restaurant Association Show. It did so again this year, but added a significant wrinkle: It offered a preliminary forecast for 2013.

The forecasts are quite positive, with both ’12 and ’13 expected to be the best years for operators since the onset of the Great Foodservice Recession in late ’07. The firm forecasts total industry nominal growth of 3.9% for this year and 4.3% for ’13.  Real growth is set at 1.5% in ’12, 1.8% in ’13. In comparison, real growth in ’11 was barely positive.

In discussing the new forecasts last week, Joe Pawlak, v.p. at Technomic told FER Fortnightly, “The market just finally looks to be strengthening.”

Menu-price inflation for most operators is expected to be 2.5% in both years, a bit of a surprise as there has been upwards pressure on both wholesale food prices and menu prices for most of the past 12 months. Technomic appears to see these pressures moderating, a good sign for operator margins and capital formation.

Technomic pushed up its current-year forecasts for nearly all foodservice segments, some by a point and a half or more. For example, the firm’s original forecasts for limited- and full-service restaurants, released last September, predicted real growth of only 0.5% for limited service and flat real sales for full service. According to the May revision, limited service is expected to show 2% real growth in ’12 and full service to gain 1.5% after menu-price increases. Since these two segments account for nearly 63% of total market sales, the upward revisions are significant for overall industry growth.

Real growth of the “Beyond Restaurants,” sector, which includes the noncommercial segments as well as retail, travel, lodging and leisure, was revised up to 1% real growth for ’12 from 0.5% in the original forecast. The only segment that Technomic revised downwards for’12 was retail hosts and that only by 0.1 point.

Not a single segment is forecast to post a decline in its growth rate in ’13 from its projected growth in ’12, though a number of segments are expected to repeat their ’12 growth rates. These include hospitals, education, corrections and retail segments. The two big restaurant segments are forecast to post moderate growth-rate gains in ’13 versus ’12, as the market continues to improve.

More information on Technomic forecasts and research products can be found at www.technomic.com.”””