The restaurant industry is no longer benefiting from a growing economy.
Numerous factors have contributed to lower sales and meager profit margins, forcing the industry to identify its mistakes, reevaluate trends, and hopefully, clear the path for a future renaissance.
This post is based on the Washington Post article, We’ve Just Lived through the Greatest Period of Restaurant Growth in U.S. History. Here’s Why It’s Ending, by L. Reiley, July 8, 2019, and the YouTube video, Mikael Jonsson. Discussing: Specialisation – The Future of Fine Dining, by Foodontheedge, December 18, 2015. Image source: DreamPictures/Blend Images LLC.
1. What forecasting technique could you use to predict demand in the restaurant industry for the next three years? What predictor variables would you include in your model?
Guidance: Forecasts for the next three years would involve a trend (not necessarily linear) and a regression model. According to the article, likely predictors may include economic indices, number of competitors, costs, socio-economic factors, mall traffic, lending rates, demographic variables, etc.
2. Based on the article, at what stage of the service life cycle is fine-dining? Is it good or bad for the restaurant industry in general?
Guidance: The article suggests the growth of fast casual dining and the decline of fine-dining (casual or formal). Innovations occur in chef-driven, fine-dining restaurants. Moreover, future chefs are trained in such establishments. Therefore, the outlook for the restaurant industry both in terms of culinary advances and experiences depends on the survival of fine-dining establishments.
3. What recent changes in the supply chain have threatened the profitability of US restaurants?
Guidance: In theory, the growth in food delivery options should have increased revenue at no extra cost. In reality, adding a middleman has cut into the profitability of small, independent restaurants and has threatened their existence.