Restaurants Have Not Seen Post Election “Bounce”

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By USADC.

Restaurant goers surveyed by Pentallect, a food industry strategy and business improvement firm, in collaboration with its insights partner Critical Mix, are increasingly making food at home versus using restaurants since the election.  Specifically, 35% report making food at home more often versus 13% using restaurants more often during the past 90 days. While 47% believe the Trump Administration will be positive for the economy and 38% believe it will be positive for their personal finances, this has not yet led to any noticeable improvement in restaurant performance.

Bob Goldin, a Partner at Pentallect, says “46% of our respondents claim to have very little or virtually no discretionary income. This is a huge drag on the restaurant industry, which is highly dependent on discretionary income.  In this type of environment, consumers tend eat at home to save money.”  Goldin also notes that consumers have a growing number of attractive alternatives to restaurants, including meal kits, home delivered groceries, supermarket prepared foods, farmers markets and specialty stores.  “In many cases, these new and emerging channels are neutralizing some of the major advantages of restaurants.”

Despite the current inertia, Pentallect forecasts that restaurants will outperform traditional retail in 2017 as consumer uncertainty over the election’s socio-economic impact subsides and restaurants focus on building consumer traffic.  Rob Veidenheimer, Pentallect’s President, predicts “restaurants, especially independents, will benefit by their innovation, flexibility, quality and broad appeal on multiple dimensions.”  The firm expects restaurants to grow 3.0 – 4.0 % and traditional retail 1.0 – 2.0% this year.

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