As internationally renowned restaurateur and occasional country singer Kenny Rogers once told us: "You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run." Unfortunately with the mixed signals the economy continues to send us it's getting harder and harder to know when to do what.
When the calendar rolls over to 2013 in a few short months, the U.S. economy will enter its sixth year of what most economists will consider to be a weak business environment. And, unfortunately, it would seem we are destined to remain in an operating climate that will enjoy moderate improvement at best in the coming year. This is not exactly the greatest news in the world, but it could be worse. While most industry forecasts don't call for break-neck growth, the industry seems less likely to experience whiplash-inducing declines.
So much of this, though, remains out of the industry's hands at the moment. The industry will inch along like the cars during rush hour on the Washington, D.C. Beltway until the U.S. breaks its economic gridlock. And job creation represents the key that will unlock the industry's growth potential.
As Hudson Riehle of the National Restaurant Association has told me time and again, an improved employment situation is critical to the success of the foodservice industry because it improves consumers' cash on hand, which leads to more spending in restaurants and other foodservice outlets, and increases their confidence. It's an economic concept so simple that even I can grasp it. Now if we could only get the politicians in Washington, D.C. to understand this.
From all appearances it would seem that the foodservice industry will experience moderate but real growth next year. That means operators will continue to focus their efforts on driving incremental growth within their existing units. Unfortunately, that growth will most likely come at the expense of another foodservice operator. As such the results on an individual basis will remain mixed and a number of operators will hold off on adding units until the economic picture becomes a little clearer.
For its part, the operator community spent much of the past five years working diligently to get its house in order by refining prototypes, sharpening menus and more. Many operators have been successful in these endeavors due to their willingness to leverage the expertise of their supply chain partners to design more labor- and energy-efficient prototypes and expand into new dayparts. They have seemingly taken the advice of The Gambler and are learning how to play the game right.
Along those lines, I was thrilled to attend David Zabrowski's Kitchen of the Future presentation, which was part of the Food Service Technology Center's 25th anniversary celebration. David's thought-provoking approach took my mind off the current economic malaise by exploring ways to re-think foodservice design, equipment development and more. That's the exciting thing about this industry: the way it continues to evolve. More on the FSTC's celebration in our next issue.
Now it's time for you and me to decide whether to walk away or run.