National restaurant association Research Chief Riehle talks Industry, Economy

As senior vice president of the National Restaurant Association’s Research and Knowledge Group, Hudson Riehle directs consumer, economic, market, human resources, tourism and operations research. He also oversees the National Restaurant Association’s Knowledge Center, which provides information services to restaurant operators and researchers.

Frequently cited in major national and international newspapers, he has appeared on major national TV broadcasts and has authored a variety of articles. Riehle serves as an information source and spokesperson for the restaurant and hospitality industry.

What is the state of the restaurant industry today?
We expect sales this year will exceed $825 billion, despite some challenges. Among consumers, there is still pent-up demand for dining out. Our research indicates 90 percent of Americans enjoy eating out, but income issues restrict their ability to patronize restaurants as often as they’d like.

​Who is dining out and where?
Income and employment are often related and, generally, the areas of the country posting the highest restaurant sales growth have the highest employment growth, income growth and population growth. Where are people dining? Tableservice restaurants last year posted sales of $263 billion, and quickservice, which includes fast-casual restaurants, posted sales of $234 billion. Consumers also are interested in restaurants specializing in the snack and nonalcoholic beverage category.

How important is takeout and delivery to the restaurant business?
The off-premises market – takeout, delivery, drive-thru, curbside and food trucks – has been an important driver of sales over the past decade and is only growing more important. The most rapidly developing component is delivery, especially in quickservice. From the consumer perspective, there’s nothing more convenient than having a restaurant come to them.

What are the biggest challenges to the industry today?
Labor costs and talent recruitment. After analyzing hourly eating-and-drinking-place wages over the past three years, we discovered that wage growth in our industry has become substantially higher than private-sector wages. New minimum wage mandates in multiple states and a shallow labor pool caused a dramatic increase in labor costs, making it much more difficult economically to operate a restaurant. If you ask restaurateurs, 50 percent will tell you that high labor costs threaten their long-term success.
​
What should we expect a year from now?
We’ll still be talking about labor, and there will be even greater focus on the off-premises market, especially delivery. That will include alcohol, not just food. We also expect there to be greater emphasis on sustainability, sourcing, technology, kids’ meals and global flavors.