State Of The Restaurant Industry 2019

State Of The Restaurant Industry 2019


Hey everybody! In today’s video, I’m gonna deliver what I call this state of the restaurant industry for 2019. So, the state of the restaurant industry. What is happening in the restaurant industry and what’s gonna happen in 2019? Stick around, if you want to see that coming up plus, if you have not already subscribed to my channel. Please! Go ahead and click, either
on the icon the restaurant boss icon or click on the subscribe button. But don’t even click on it just go ahead and smash it. So, you can be a subscriber and get
all the updates. As soon as, I publish every new video, every week. Delivered right to you. Hey everybody Ryan Gromfin here. Author, speaker, chef, restaurateur and the founder of the restaurant boss.com. As well as, clickbacon, and this is the state of the restaurant industry coming
out for 2019. So I’ve got my little trusty note card here. That’s gonna help me out because there’s some stats. But, really there’s three things that we need
to look at as we look into 2019. I always like to do a review of the stats. What happened in 18? And, what do we predict is gonna happen in 19? Then, we’re gonna talk a little bit about technology. It’s really becoming a major player here in
2019 even more than it was in 18. And, then we’re gonna talk about boy bands. What a boy bands have to do with restaurants. Will stick around and find out. So, first are the stats. So, let’s go over some of these stats. So, the restaurant industry grew at 4%. Which is basically, what everyone was predicting for 2018. And it’ll continue to grow at about that pace. However, that’s a slowdown from the historical growth. Since they started measuring the rationale industry in the 70’s. It’s grown at about 6.4% an year. So 4% is still growth but it’s a slowdown. They’re expecting about the same 4% growth for 2019. So, it’s good that it’s growing but it’s bad
that it’s growing at a slower rate, than it has historically. There’s another challenge coming up and that is the shrinking budgets, of consumers. So, in the United States historically, consumers or your average ordinary everyday person. Spends about 12 to 13 percent of their month budget or their monthly expenses on food and dining. The challenge is though that’s down quite a bit. Over the last couple years from normal. We’re spending less on food and dining, as a whole than we have in the past. So, if we combine growing
restaurant industry but, a slower growing. And, then a smaller piece of the pie or a
smaller pie in general, that we’re taking a smaller piece of. We’re definitely gonna experience; maybe a flat or a slight slowdown next year. Even though it’s gonna technically register as, growth. To you, it will potentially, possibly feel like a slowdown. So, that’s something to be aware of. But, there are a couple of areas of growth, that we need to pay attention to. The first area of growth, is in fast casual. So, think of fast casual as possibly, like a sit-down restaurant, but a really-really quick sit-down restaurant, but really this is
more counter service, that you’re gonna sit down and eat at. So, quick service is going to be, order at the counter and take your food to your own table or get it to yourself. Fast casual kind of falls into that realm of, it’s a little bit of
quick service, it’s a little bit of casual dining but, where I really see
fast casual growing is gonna be, where you order at the counter, sit-down and
then service takes over from there. There’s a couple of restaurants like
this here, in Austin. That are absolutely crushing it and there’s a few others that I know of around the country. That style of service, that fast casual
service is what’s really gonna grow at a faster pace. They’re predicting, another year of 7+% growth, in that area. However, off-premise growth is where it’s at. Off-premise catering and delivery has
grown at 37% last year and they’re expecting it to grow even more
than that, maybe a 40% growth, again this year. So, yes! Those Uber eats and those grub hubs and whatever it is. That’s helping, push this industry; are
becoming a big part of the industry. So, you’ve got to be taking advantage of
that. Now I’ll do another video later on, about how to best set your restaurant up
for that type. Because, I know a lot of you out there are concerned about, the percentages. So, maybe go ahead and put something in the comments here. Are you utilizing in Uber-eats or GrubHub or Door-Dash. And if so, what are your thoughts? If you’re not, what are your concerns about it? And we’ll go ahead and address those in the comments. So, go ahead and put those comments in there right now, while you’re watching. And we’re gonna tackle the second part. Which is technology. Yes folks! Technology is here. If you look back, at some of my state of the
restaurant industry addresses, three, four or five years ago. I wasn’t a huge fan of
technology in restaurants. I didn’t like Kiosk. I didn’t like self-service ordering. I didn’t like online ordering. I didn’t like these delivery services but
guess what. The technology is getting better. Users are getting better, at using
that technology, and technology is here. So, you better be embracing it, like seriously. You better be embracing technology. If you don’t have awesome online ordering, you better look into it. If you don’t have any type of self-service or Kiosk or Tablet or something like that again depending on
your restaurant. You better look into it. I have a few clients, who’ve recently
switched over, from paper menus to digital menus. It’s been fantastic for them. Just technology in general, is gonna play an even bigger part of the rationale industry in 2019. So, what I’ve got here on my notes are ordering Kiosks, online ordering and outsourced delivery are gonna be the three areas to pay attention to. Now, this brings us to the boy bands the third part, right! What a boy band’s have to do with the restaurant industry. Well, again if you followed my
kind of year end or earlier addresses in the past. You probably already know what I’m talking about. When I say boy bands and what I mean by that are, private equity investors are shaping the restaurant industry. What’s happening with these private equity investors is that. They’re coming in with so many dollars because of their businesses. They’re not just restaurant people, opening restaurants. These are business people, these are finance people, these are New York West Coast investors. Who are investing in restaurants. They’re
finding brands that are doing well. But, need money and expertise
to grow, and then they’re hiring the best chefs, the best marketers, the best
interior designers, the best exterior designers, the best architects, the best
lighting people, the best music people. And they’re building these like super
restaurants or boy bands as I like to call them because that’s exactly what a
boy band is. Is basically a producer in an office, who knows music and has a lot
of money. Goes out and finds, five or six kids, that are all good at one thing. Puts them into a band and then hires the best choreographer, the best stage designer,
the best writers, the best musicians and really those boys are just the front to
a machine that’s running behind. So, your competition that you’re facing is and you know it, because you’re hitting up against these corporate restaurants, is
getting better and better, in the same price points. So, we got to be aware that, we got to step up our game. Here’s what I’m suggesting: Tight concepts with clear messaging. What do I mean by a tight concept with clear messaging? Well, a tight concept is something that has a smaller menu, a very specific market, a very specific food product, maybe it’s a cultural type of food or maybe it’s a specific type of food that varies. Right! You’ve if you haven’t, we’ll put a link below here. But, go watch the video that I have about. You could either have a wide menu or a deep menu. But you can’t have a deep and wide menu. This is what, I mean by a tight concept with a clear message, or clear marketing, or a clear story. Who exactly, is your customer? and if you say, everybody! Go back to the drawing board. Wide concepts are going to struggle. The concepts that have huge menus, that offer everything, to everybody. That try to appeal to Millennials and
Gen Ys and Gen X’s and Gen Z’s and baby boomers. You’re gonna struggle, big time. Even more, than you are already. Quality of food and service are gonna
reign supreme. Well you might be thinking yourself of course Ryan quality of food and service. We already know that but no I’m being really serious here. Like your food has to be epic. This is the first question. I asked on when I get on the phone. I might say, “Why is your restaurant struggling?” They say, “Well! I don’t know. You know, maybe this, maybe that.” I say, “Is your food epic?” and they go, “Well! I mean it’s really good.” I’m like, “No, no, no, no. Is your food epic?” We went so far as, a client of mine. Actually, they open up a taco restaurant
and they called them epic tacos. They deliver epic, that is their goal.
Epic! Everything they do is epic. When you take a bite of their taco, the reaction they want is epic and I got to tell you they’re doing it, and they just got
investment because of it, from one of these boyband investors from a corporate
private equity group. So, I’m telling you right now. Is your food epic? and when I say service I don’t mean white-glove great service but Millennials and Gen Z’errs as they’re calling it the next group behind the Millennials. We know service and we want service. I don’t need white gloves. I don’t need formality, but I need you to be friendly and polite and I need you to
be professional and I need you to know what you’re doing. A lot of us out there struggle with that and again I’m not gonna get into it in this video but I
got tons of video on services and systems and operations and hiring. But your food has to be epic. Your service has to be on it. The best will do better. Sorry for the long video but here’s what I mean. We’re gonna face an economic downturn. I’m not an economist. I’m not a professional investor but we have been on fire, in this economy for the last ten
years or so, and historically in the United States and in the world, we
usually only grow for about seven to eight, maybe nine years. Before we see a
slowdown. We’re coming into our tenth or eleventh year of growth. Ever since the OA crash, we started recovering in 2009. So, we’re coming up on ten years of
growth. We’re gonna see a slowdown. How big is that slowdown? I don’t know but we are gonna see a slowdown is it going to be this month, next month, this year, next
year. I don’t know but we’re gonna see a slowdown and when we see a slowdown the best will do better. Some are not going to survive. Why are the best going to do better? Because, when those other restaurants, the ones that are just barely getting by right now are gone. and they will be gone. Unfortunately some of restaurants are going to be on the chopping block. If you’re not already. When there is a slowdown, the best are
gonna pick up a little bit of your business. So, if there’s five Mexican restaurants in a community. One of them is good, one of them is epic, and three of them are just okay. If those three closed down. The good ones gonna pick up, a
little bit of business and the epic one is gonna pick up a lot of business, not all of it. But, all those diners. Don’t need to go out for those other two restaurants to do better. Just think about for a second, if only a few of the diners of the three restaurants that went out, end up at
those two restaurants. Those two restaurants are gonna do better. Because, even in a downturn, the best are not gonna lose business. They’re gonna pick up business. So, strive for the best and I know you’re saying to me, “Of course
obviously, we strive for the best.” I mean get to it. Stop setting goals and not following through on them. Stop saying, you’re gonna do it tomorrow. Stop saying, it’s my staff’s fault. Stop saying it’s this. Stop saying it’s that. Things are gonna change. Get on it. I love the restaurant business. I love where we’re going in the future. I love working with people, who want to be
the best. Because they’re gonna be the survivors and they’re gonna thrive. I apologize for the long video here. It may have sounded a little grim and to be
honest with you. I see 2019, as a little bit grim for some. But, for those that are crushing it, for those that know the rule for success, for those that are working
with coaches and mentors and professionals. You guys are gonna do
awesome in the future. Leverage the technology. Study the statistics, know what’s going on out there with your competitors and what’s happening in the
economy and everything around you, and 2019 is going to be a fantastic year for
you. So, set some goals but more importantly; follow through on your actions. Pursue those goals and don’t stop until you’ve completed them. Welcome to 2019 folks! It’s just around the corner. My name’s Ryan Gromfin and with the Restaurant Boss. If, there’s anything I could do to help you. If you have a question, post it below and I’ll see you in next week’s video. Have a wonderful day. I want to thank you for watching
that video. If, you can do me three really quick favors right now very quick. The first is if you haven’t already, will you subscribe to this channel. In a moment, some things are gonna pop up on your screen some buttons and one of those
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36 Replies to “State Of The Restaurant Industry 2019

  1. Awesome video, R-boss!!! Pleas How do you see service improving in the fast-casual space with the increase of technology & will the need for service staff decrease?

  2. Hi,
    I'm based in Johannesburg, South Africa. Uber eats charges 30% over here. We have our own delivery drivers, with bikes, as well. Our own delivery sales have dropped a bit since listing on Uber eats but they have made a big difference to our sales, uber eats is averaging about 15-20% of our monthly turnover at the moment.
    We are also listed on another delivery service called MR Delivery, they've been around a lot longer than Uber eats, they've just increased their commision percentage from 20% to 25%, our sales, through them, average about 25% of what we do through uber eats. A few of the local bigger franchises have started their own apps, Nandos and Steers come to mind. I think eventually all of us will have our own delivery apps but at the moment UberEats is the number one food delivery app in SA.

  3. Thanks for the info Rboss… Looking to start a fast casual business model utilizing delivery is it best to go third party ie uber eats grub … or utilize in house sources hiring delivery drivers …

  4. I love your videos and it has been really helpful! I have began opening a fine dining ethnic establishment but I need help!!! How will the market look for that type of establishment?!

  5. Hello
    I run a takeaway and delivery joint in Mumbai, India. Delivery constitutes 90% of revenue. Food delivery apps are booming like anything here. We are given exclusivity by the leading food delivery platform. That means we can not be on any other platforms. For that they have promised a profit.
    My question is whether to continue with the exclusivity or not. What are the risks involved if we are not on other platforms.
    Your videos are very helpful.
    Thank you.

  6. Hi I need your help my husband and I are planning on opening a restaurant. We are new to the industry however it's been a life long dream. All the years I have been on YouTube your video has been the only one I have commented on. I would really love to get your feedback on our ideas and just gather a basic understanding. Thanks hope to hear from you

  7. I have used Uber Eats, Grub Hub and Favors much more in 2018 than I had before. Both for home personal use and at the restaurants that I manage.

  8. awesome video.. I subscribed to u almost 2 years ago.. since then I opened my restaurant.. and of course have been super busy.. u weren't lying when u said it was gonna be hard… but so far it's been great.. I have exactly what ur talking about.. it's hard to find a unique concept cuz usually it's already been done.. but i believe i have one.. customers love the food.. but I kno I still need help.. so hopefully I can talk with you and get some insight on some of my issues..

  9. I use Skip the dishes (canada) and while it's great and all its the % they take thats just killer. We've been around 25% and have at least been able to fight off some extra fees(our top location is just up the street from there HQ, so there staff and management love us) but I'm having a hard time justifying staying open later at my location which has a massive rent, and very high lunch rush, and zero dinner rush outside of events at our arena. I run hours 830 am to 6pm Monday to Friday currently

  10. Great video Ryan, and thank you for always giving 110%

    We were just talking about this yesterday

    The reason there is a slight decline is because there are so many mediocre concepts that have opened, that will eventually close (interesting how I can tell right away now if something will make it), but what they do is take away maybe 10-20 people a day that normally would have added to your 200 person day. That mediocre restaurant can’t survive on 10-20 people a day however dips into the profits of the better restaurants slightly

    We are lucky to see a steady small increase in our sales comparably, which furthers the drive to just get better and better at what we do

  11. I do have a new video idea for you. How about one on how to handle false reviews by people who get mad when they dont get there way? How to fix it? Commenting doesnt seem to help.. thanks. Your videos are great by the way!

  12. Love your vids! My disagreement with, not yours, but the industries analysis is, they are looking at top of the line food emporiums. Mc donalds, Wendys, Burger Kind will survive without a problem. The specialists will fail if they subscribe to the " My specific Food Venue". We don't educate the public. The public educates us!  We can put a specific item on the menu as a "Special" and see how that works, but in general, sales trump industry analysis.

  13. You’re videos are very informative. I run a family restaurant and bar and my employees are always late. What is the best system to have in place. I was thinking of getting a time card or time clock.

  14. I have a small restaurant that I run with my family, we open six months ago, and it has been a real struggle. We have not try Uber Eats or Grub Hub because they want to charge 30% and we believe that is a little steep for a starting business. What are your thoughts?

  15. Uber eats and grubhub have worked well for me. I turn it off when I'm busy and I don't worry about staffing or scheduling drivers. What they take I consider payroll overhead

  16. Hi. How does a coffee shop concept fit into your analysis? I am breaking ground soon and see it as a tough environment but one that might fall into fast casual. Thanks.

  17. Love your videos. Wish my restaurant hired you for there consultant!!
    Anyways I’ve been in the restaurant business since I was twelve years old . So I think I know a thing or too.
    The state of the industry here in California is almost over!!!!To starting off with higher rents , minimum-wage starting in 2019 will be $15 throughout California, and the food cost going up ever week seems like it all restaurant owners with be probably making 2% of every dollar that comes in. That’s nothing to write home about.

  18. Thank you for this information. Your channel has been so helpful that I've recently subscribed. I'm investing in a small donut shop to pull it out of a ditch. It suffers from loose financial practices and recently reduced sales volume. We have several doable ideas for increasing sales, but there is a long road to hoe for the financial practices issue. Making sales, I assume, is nice, but if you can't/won't control costs, the business will quickly succumb to mismanagement. Could you make a video for course correcting in such conditions? Thanks!

  19. Great video. Thank you for putting these out. I need all the help I can get. One question, we are so busy on Friday nights it is hard to keep up and customers get upset about the wait times. We have a really small kitchen and I can't cook food (pizza's) any faster. It is a good problem to have but I dread Friday nights because of the complaining. Any thoughts? Thank you

  20. Restaurants must make sure to have a branded solution for their online ordering. It's great to use classic 3rd-parties like GrubHub, Slice… however, restaurants must convert customers from these typical middleman platforms to customers who order directly from the restaurant. Why?

    Branded solutions that can be added to an existing website of the restaurant are more affordable, build restaurant's brand and the restaurant gets to capitalize on the customer data.

    These branded online ordering companies should handle the setup and management so that the restaurateur can focus on the dine-in customer's, and/or making the food.

  21. I'm from the UK. The delivery service such as deliveroo and ubereats are good. But charge 25%+ commission to the restaurants. Which is a huge hit

  22. Hey Ryan love the content, appreciate it! Whats your advice to a Chef looking to open his first restaurant? I have a space that has finally come available, a concept, but was hesitant because I thought maybe start with a food truck with a similar concept and generate the revenue for a brick and mortar. I might have two possible investors but if I go solo I would be looking for financing (which I understand is almost impossible for a start up). Thanks Ryan!

  23. Thanks RG!
    Curious what you think a good concept for a food court type setting with no hood? Only a couple hundred square feet. I have a sandwich shop idea on paper but maybe another concept idea would work better, maybe a trend? Thanks!

  24. Epic! You explained exactly how I saw how the industry was changing, especially with the new Sharks who are now getting into the industry as investors. You said exactly how I wanted to scale my restaurant into a business and stay in competing with the big sharks. Specialization is key, and finding a niche is the strategy.

  25. Hey Ryan, still love your video !
    I was wondering, where can I find accurate industry numbers such as average Food cost, COGS, prime cost, and so on, by different countries ?
    Thanks a lot.

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