Foodservice Equipment Reports

Jobs Growth, Falling Fuel Prices Push U.S. Operator Market, 2015 Forecasts Higher

Strong jobs growth and falling gasoline prices are among the factors driving sales and customer traffic growth in the U.S. restaurant market during the last four months of 2014. And the improved consumer environment also underlies an upward revision of Technomic Inc.’s 2015 forecast of foodservice operator sales, released to the firm’s customers in mid-January.

Technomic, a Chicago-based foodservice research firm, now forecasts total U.S. foodservice industry sales will grow 3.9% in current dollars, with real growth, after factoring out expected menu-price inflation, pegged at 1.5%. This compares with the firm’s preliminary 2015 forecast, released last May, which set nominal operator sales growth at 3.1% with real growth of 1.2%. Menu-price inflation is forecast at 2.5% this year. In the original forecast, it was 2%.

“Improving employment is the key driver behind better prospects for the industry and our main reason for increasing our forecasts,” Joe Pawlak, Technomic v.p. told FER Fortnightly.

Interestingly, while the dramatic drop in gasoline prices is a factor in the improved consumer prospects that led to the forecast of stronger growth, Pawlak explained it’s not as big a driver as one might expect. “We have found that although (the gas price decline) has put more money in consumers’ pockets, they are using most of this new-found cash to pay bills, credit cards, and other essentials, not on discretionaries like foodservice,” he said.

The improved outlook for 2015 comes after a surge in restaurant sales and traffic in the U.S. market during the last four months of 2014. The NPD Group, whose foodservice research practice is located in Rosemont, Ill., outside Chicago, reported a dramatic spurt in traffic during the September-through-November quarter, a period during which fuel prices plunged and employment growth surged. After years of declining traffic counts, full-service operators finally saw an increase in customer visits, NPD reported. Overall traffic rose 1% versus the same period year prior, as limited-service operators also saw a 1% traffic gain.

Bob O’Brien, NPD’s global senior v.p.-foodservice reported in his blog in early January that same-store sales for 60 U.S. chains the firm tracks in its SalesTrack Weekly report saw “a steadily increasing rate of sales growth” during the second half of 2014. “The sales growth culminated in a 6+% burst in early December. The economy is humming and it looks like 2015 will be a better year for restaurant industry sales.” NPD has forecast a 1% gain in overall restaurant traffic in 2015. It would be the first overall traffic gain since 2012 in the mature U.S. market.

The National Restaurant Association’s Restaurant Performance Index also recorded the surge in restaurant sales and traffic in the latter part of last year. The RPI hit its highest mark since December 2004in the October survey, on strong gains in the components tracking current same-store sales and traffic.

NRA was scheduled to release its 2015 forecast for the U.S. operator market just as we went to press.

For information on Technomic forecasts and other research products, go to  Information on NPD research can be found at The details on NRA’s Restaurant Performance Index and its 2015 forecast can be found at

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