Foodservice Equipment Reports

Technomic Tweaks 2016 Forecast, Sees Best Year For Operators In A Decade

A favorable macroeconomic environment in the U.S. is driving operator-sales growth rates to levels not seen since 2007, according to the 2016 foodservice industry forecast revision released by Technomic Inc. on Jan. 12. The Chicago-based foodservice research firm predicts total 2016 industry real sales will grow 2.4%, after factoring out anticipated price increases from forecast nominal sales of 4.7%.

The firm revised its estimate of 2015 sales to 5.1% nominal growth and 2.3% real growth. Forecasts for both years are changed only slightly from Technomic’s preliminary 2015-16 forecast released in June of last year.

In both years, forecasts for restaurant and bar sales, which account for slightly more than two-thirds of the market, were revised up slightly, while “beyond restaurants” were nudged lower.

“2016 prospects will be about the same as 2015, with strong growth in fast casual, supermarket foodservice, lodging and senior living driving the way,” Joe Pawlak, managing principal at Technomic Inc. told FER Fortnightly.

Part of the change in nominal growth rates and real growth rates can be attributed to Technomic’s updated estimate and forecast of menu (commercial segments) and food-cost (institutional) price inflation. The blended estimate for 2015 was revised from 3% to 2.9%; the forecast inflation for 2016 was lowered from 2.5% to 2.3%.

“Although lower food commodity costs will put less inflationary pressures on operators,” Pawlak added, “higher labor costs will somewhat offset this as low unemployment and local legislation result in rising labor costs.”

In comments on the dominant restaurant segments, Pawlak said, “There will be a slight uptick in QSR sales growth in 2016, driven primarily by breakfast.” Traditional QSR sales growth was suppressed in 2015 in part by McDonald’s slow or negative growth. Pawlak also noted that “You’ll notice a slight downtick in fast-casual growth.  Since Chipotle represents about 10% of fast-casual sales, its sales hit is expected to impact the segment as a whole.” Still fast-casual sales are forecast to grow 10.3% nominal in 2016. Full service, which finally recovered from the Great Recession in 2015 with 5.5% nominal sales growth—the segment outgrew all limited service for the first time in more than a decade—is also expected to post slower growth of 4.5% in 2016.

Information on Technomic research products is available at

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