A rosy outlook for restaurants
Percentage of restaurant operators who expect to have higher sales in six months: 57
Percentage of restaurant operators who expect to have lower sales in six months: 7
Percentage of restaurant operators who expect their sales to be about the same in six months: 36
Source: National Restaurant Association
Winter Restaurant Week
Twice each year, the Miami Valley Restaurant Association invites its members to participate in a Restaurant Week promotion in which restaurants offer a three-course meal for a special price — either $20.15, $25.15, or $30.15 — with $1 from each meal sold going to a local non-profit organization.
This year’s Winter Restaurant Week will start Sunday and will run through Jan. 25 at participating restaurants. For more information, go to dineoutdayton.com
Buoyed by a surge of diners to close out 2014, restaurant owners in the Dayton area and across the nation are more optimistic about the year ahead than they’ve been in years.
"Most local restaurateurs are very optimistic," said Shanon Morgan, president of the Miami Valley Restaurant Association. "Many had the best December sales in many years, and are hopeful that will carry into 2015."
Restaurants have benefited from mild weather — until early January, anyway — and from lower gas prices that put extra dollars in consumers’ pockets. Throw in an improving economy, stronger job outlook and growing consumer confidence, and the result is a recipe that restaurants can warm up to.
One of the region’s oldest restaurants — The Pine Club in Dayton — closed the year with its most successful month ever.
“The final six months of 2014 showed extremely strong sales each month, and the year finished with December as the best month in both head count and overall sales in our 69-year history,” Pine Club owner David Hulme said. “I see no reason why the business trends we saw in 2014 will not continue into 2015, and I am very confident in my outlook for this year.”
That level of performance and optimism is by no means universal — some independent restaurant owners interviewed for this story said they are being squeezed by rising food costs and are finding it hard to compete with chain restaurants. But nationwide, restaurant operators’ confidence in the overall direction of the economy is the highest it’s been in nearly four years, according to the National Restaurant Association.
In its most recent monthly survey of restaurant owners and managers released Dec. 31, the restaurant association reported that 41 percent of restaurant operators said they expect economic conditions to improve over the next six months — the highest level since 2011. Only 8 percent expect economic conditions to worse in six months, while the remaining 51 percent expect economic conditions in six months to be about the same as they are now.
A strong 57 percent of restaurant operators expect to have higher sales in the next six months compared to the same period in the previous year. Only 7 percent expect their sales volume to decline.
Karen Wick-Gagnet, co-owner of CoCo’s Bistro in Dayton, shares the national positive outlook. Wick-Gagnet said her restaurant’s sales were up a robust 15 percent in December, and the number of customers rose 13 percent. Still, diners are looking for value and for healthy choices on their dinner plates, so restaurant owners have to respond nimbly in order to keep up the momentum this year, Wick-Gagnet said.
Restaurant industry research firms are cautious in their optimism for 2015: Technomic projects that restaurant visits will rise 3 percent in 2015 over the previous year, while a second industry research firm, NPD Group, predicts a 1 percent increase.
Mary Miller owns four restaurants of varying concepts — the Wellington Grille in Beavercreek, The Barnsider in Harrison Twp., The Blue Berry Café in Bellbrook, and The Harrison in Tipp City — and said her outlook for 2015 is positive enough to consider a capital-improvement project. She is looking into adding an awning and covered patio seating at the Wellington Grille.
“I’m always optimistic — that’s the only way a restaurant owner can be,” Miller said.
Fast-rising food costs, however, represent a potential cloud on every restaurant owner’s horizon, eating into profits and in some cases forcing menu price hikes. Beef prices rose 18 percent in 2014, and pork prices jumped 10 percent, according to the U.S. Department of Agriculture. Egg prices jumped 6.2 percent, and dairy products rose 5 percent.
“Those prices just can’t keep going up,” said Amy Haverstick, owner of Jay’s Restaurant in Dayton’s Oregon District. Haverstick’s seafood costs jumped from 8 percent to 12 percent last year, based on the type of seafood.
The restaurant, known for its seafood, can’t compromise on quality or change its menu concept, and thus has little choice but to pay the higher food costs, Haverstick said. But she is concerned that raising menu prices could scare away customers.
Despite those concerns, Haverstick said she remains positive about the outlook in 2015, on the heels of a strong December.
Candace Rinke, owner and chef at Hawthorn Grill in Kettering, also was more cautious in her outlook, saying that independently owned restaurants can find it tough to compete with chain restaurants, especially at a time when wholesale food costs are going up so rapidly.
This region’s diners are looking for a deal, Rinke said. But surging food costs can make that difficult, especially when the beef tenderloin she purchases at wholesale for one of her dinner entrees jumps $7 a pound as it did last year, the restaurant owner said.
The purchase of prime beef is the primary wholesale food cost at The Pine Club, and Hulme called the 2014 price increases “staggering.” But he believes the positive momentum of 2014 will trump the rising food costs.
“I believe the Midwest is beginning to feel a returning strength in the general economy, and I see a more positive attitude and returning confidence,” Hulme said.
“I’m not suggesting our customers are pleased with economic conditions, but I believe they now have some confidence in the future, and their spending habits reflect that confidence.”
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