Foodservice Equipment Reports

Technomic Forecasts Moderating Operator Growth For 2013 And ’14

Growth of foodservice operator sales is expected to slow this year and pick up steam only slightly next year, according to new forecasts and revisions from Technomic Inc. The Chicago-based research firm trimmed its new forecast for the current year, released at the end of the NRA Show, to 3.8% from 3.9% in the firm’s January 2013 revision. Its first forecast for next year foresees slight improvement to 4.1%. With menu-price inflation pegged at 3% both years, real growth is forecast at only 0.9% for ’13 and 1.1% in ’14.

“Headwinds created by the recent tax holiday expiration, continued slow disposable-income growth and historically high unemployment continue to impact the industry,” Technomic V.P. Joe Pawlak told FER Fortnightly last week. Pawlak will keynote FER’s upcoming Multiunit Foodservice Equipment Symposium in Austin, Texas, on June 11.

This new forecast signals a slowdown from revised growth for 2012, which Technomic boosted by a full point to 5.2% from the January update. And menu price inflation was lower in ’12, leading to real growth exceeding 2.5%. (Technomic uses a smaller inflation deflator for certain noncommercial segments, which precludes simple subtraction of the estimated and forecast menu-inflation numbers.)

As has been true for most of the last decade, the growth of quick service is expected to outpace full service. The former, which includes the faster-growing fast-casual and beverage concepts, is forecast to grow at 4% in current dollars this year and 4.5% next, while full-service growth is pegged at 3.5% both years. (For an interesting twist on chain versus independent growth rates, see related story in this issue.)

Pawlak also provided Fortnightly with some insights on segments growing faster than average:

  • Lodging (expected to grow 5.0% in both 2013 and ’14):  Banquet and catering business is strong, as the convention business continues to strengthen.  Limited-service hotels with complimentary breakfast and limited-service food bars are growing.
  • Supermarket foodservice (6.0% 2013; 7.0% 2014):  Retailers have rediscovered the formula for providing the quality and value consumers look for in prepared foods.  Expanded offerings and unique foods at a very fair price point are the major drivers of consumer usage of this segment.  This segment is also becoming more of a foodservice solution for lower income groups.
  • Colleges/Universities (5.0% 2013; 5.5% 2014):  Mostly driven by enrollment gains, but also by colleges upgrading their foodservice offerings to compete better with local restaurants off campus.
  • Senior living (5.5% 2013; 6.0% 2014):  Aging boomers are entering senior living facilities at an accelerated rate. As the housing market improves, more seniors are able to sell their current homes, and will then have the financial wherewithal to purchase a stake in this emerging segment as a living solution. Growth of hospital foodservice is also strong, with growth forecast at 5.5% both years.

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