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Economic growth supports foodservice industry across the United States

by Wyoming Livestock Roundup

Strong economic growth and low unemployment rates in the U.S. over the last several quarters has supported the foodservice industry in the United States, according to the Daily Livestock Report (DLR) in their Feb. 1 edition. 

“This does not mean business has been great for everyone,” DLR emphasized, noting more stores open means differentiated food concepts are more of a priority today than ever before. “Still, the latest data from the National Restaurant Association confirm that the industry is firmly in an expansion phase.” 

December 2018’s Restaurant Performance Index hit 101.6, just 0.2 points below the previous month. However, with a value above 100, restaurant performance is still expanding. 

“When the U.S. economy adds jobs, restaurant business tends to improve,” DLR noted. “There is a given number of meals that can be consumed in a given month, and when consumers have a job and income, they are likely to consume more of those meals outside the home.” 

January’s government shutdown has created a lapse in retail sales data, which means December data isn’t yet available, but November numbers showed sales at foodservice outlets were six percent above year-ago levels. 

“In November, dollar sales at foodservice were estimated at $60.56 billion,” the report said. “By comparison, sales at grocery stores in November were $55.709 billion.”

Another positive aspect of the restaurant index showed increases in consumer traffic, with indications that customers look to increase diversity in their choices when eating out. 

“In the last few months, the National Restaurant Association traffic indicator has been gaining and firmly in expansion territory for the past three months,” DLR commented. “This could mean two things. Efforts from larger chains to revamp their menus and stores are starting to pay off, and consumers are coming back.” 

On the other side of things, the data could indicate consumers are eating out more frequently, which includes additional trips to established restaurants, explained DLR.

The report said, “Either way, this bodes well for the industry as a whole.”

Foodservice sector expansion is also positive for protein overall and especially beef. 

“Data published by the National Cattlemen’s Beef Association based on Technomic research shows beef and chicken sharing about 30 percent of volume sales at foodservice, but beef commanding a bigger share of dollar sales since the price of product sold is much higher,” DLR said. “In an effort to drive traffic, it appears a number of larger chains focused more on beef in 2018 and some have suggested this was part of the reason for the weakness in chicken prices, especially the price of chicken breasts.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at 

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