A rocky 2019: restaurant operator confidence stumbles

Published March 15, 2019

Although restaurant operators were feeling slightly more upbeat over the course of 2018, economic uncertainty and high labour costs are weighing heavily on their minds in 2019.

According to Restaurants Canada’s latest Restaurant Outlook Survey, there has been a shift in how restaurant operators feel about the near future: When asked if they felt optimistic about the next 12 months, 47 per cent said they were either very or somewhat optimistic in Q4 2018, down from 60 per cent in Q3; and the number of pessimistic responses surged from 18 per cent in Q3 to 26 per cent in Q4.

The Restaurant Outlook Survey also asked operators who felt more optimistic about 2019 to tell us their reasons why. The top three reasons they provided were:

  • Quality of our guest experience (65 per cent)
  • Improved business practices and systems (63 per cent)
  • High-quality staff (34 per cent)

Due to increasing operating expenses in 2018, foodservice operators say they have employed a variety of strategies to offset mounting financial pressure. This belt-tightening will serve them well as consumers spend more cautiously in 2019. Improved guest experience and high-quality staff will also ensure guest loyalty through 2019 and beyond.

Operators who told us they are more pessimistic about 2019 said their top three reasons were:

  • Higher labour costs (70 per cent)
  • Stagnant or worsening economic conditions (65 per cent)
  • Labour shortages (48 per cent)

Overall business and consumer confidence down

The more apprehensive outlook by restaurant operators mirrors the recent weakness in business and consumer confidence. According to the Conference Board of Canada, business confidence has continued a downward trend that began at the end of 2017. And while consumer confidence has risen slightly in recent months, it remains below the level of the past 18 months.

The recent combination of volatile equity markets, lacklustre business investment and a slowdown in consumer spending will make 2019 a challenging year for restaurant owners.

How to survive and thrive in 2019

Ramping up marketing activities is a go-to choice for many, and more businesses are focusing on growing their social media presence. It’s a lower-cost approach to marketing with instant, targeted reach, and it’s the way to grab the attention of Millennials and Gen Zs.

Menu innovation is also a priority for some respondents. Younger demographics are worldly and adventurous and looking for new flavours. The rise of “food tribes” including vegans, flexitarians, Keto, and the like has been well documented. Providing increased options for specialty diets may help fill seats.

More insights available in the Restaurant Outlook Survey report

Foodservice operators can find more insights about how their peers plan to survive and thrive in 2019 in the latest Restaurant Outlook Survey report from Restaurants Canada.

This quarter’s report includes:

  • Top priorities and goals for restaurants in 2019
  • Menu inflation outlook for the next 12 months
  • Impact of recreational cannabis and interest among restaurants

The Restaurant Outlook Survey is one of many research reports available exclusively to members of Restaurants Canada on the Member Portal.

Not a member of Restaurants Canada and interested in joining?

Visit restaurantscanada.org/community/benefits to learn about our membership benefits or call 1-800-387-5649 x 8006 and speak to a Member Service representative.

Shiori Mine

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