Weak fourth-quarter sales and traffic slowdowns rounded out 2016 on a low note for the restaurant industry as whole, but several indicators suggest better days are ahead. A shifting economic climate promises more jobs, more disposable income and a better business environment, plus these three long-term local indicators could mean a prosperous year for Hawaii’s restaurateurs.
Many believe that 2017 is sure to bring better days ahead. And it starts with more than a hunch.
Positivity abounds in a recent National Restaurant Association poll, where results show that even though a majority of major restaurant chains reported weak fourth-quarter sales eroded by a major slowdown in traffic, nearly 40 percent of operators expect business to pick up for 2017. And things are looking bright on the brick-and-mortar front: 60 percent said they expect to expand or remodel their assets in the next six months accordingly.
It’s great that we’re seeing a lot of positive thinkers in our industry, but is there any solid backing to fuel all of this optimism?
Absolutely. There are a few trends that suggest 2017 will stand out and provide a more prosperous climate, both locally and nationally, for food industry businesses. This sudden positive upturn is based on the following trends—more jobs, an increase in disposable income and an all-around better business environment under the nation’s new leadership.
Hawaii in particular is poised to gain from three distinct long-term indicators that should favor local food service operators in the islands:
- Housing expansion. Housing growth remains the number one macroeconomic driver for the food service industry, and things are looking good with an additional 65,000 new households projected to be built over the next 10 years throughout Hawaii. Watch for new concepts and restaurants popping up to service the new communities inside a one-half mile radius of the newly constructed rail stations.
- Higher wages. All local labor indicators point to Hawaii residents enjoying more disposable income in the near future. The minimum wage will continue to jump ahead of projected inflation, and real personal income will likely increase as much as 8 percent by 2019.
- Tourism increase. Record-breaking visitor arrivals and expenditures are anticipated to continue for the next three years. With over nine million visitors accumulating a total of 80,126,000 visitor days and spending $41 each day on restaurant food, that adds up to approximately $3,285,166,000 in annual sales!
Interested in learning more about how the Harris Agency can optimize your brand & top-line business performance? Call Doug Harris today for a no-obligation consultation at 808-946-6116.
The Harris Agency was founded in Hawaii in 2004 to specialize in building strong brands and growing year-over-year sales revenue. The Agency currently provides strategic council and marketing services for category brand leaders with more than US $500 million in annual sales. Harris offers a wide range of marketing services, including Advertising, Communication, Consultancy, Creative Services, Digital, Media & Public Relations. Watch our video reel.