What is in this article?:
- NRA: Consumer confidence to remain fragile in 2013
- Avoiding the fiscal cliff
This article is part of Nation's Restaurant News' coverage of the NRA's 2013 Restaurant Industry Forecast on NRN.com, which explores various parts of the report.
Restaurant operators should prepare for another year of “economic” in 2013, with consumers reluctant to spend until the job outlook improves and employers unwilling to hire until household spending increases.
So concludes the 2013 Restaurant Industry Forecast released this week by the National Restaurant Association, which paints a still-clouded picture of U.S. consumer sentiment about the economy.
Despite ongoing improvement, the U.S. economy has only recovered about half of the jobs lost during the Great Recession, and consumer confidence is expected to remain fragile in 2013.
In the NRA’s 2012 National Household Survey, only 1 out of 10 adults described the economy as “excellent” (1 percent) or “good” (10 percent), while the rest chose the descriptors “fair” (36 percent) or “poor” (53 percent) — an outlook that has remained essentially unchanged from the previous two years.
As a result, the report said, the restaurant industry is seeing an “almost unprecedented tightening of purse strings by many households, with consumer spending growing at rates well below what would be expected during a normal post-recession recovery.”
Still, the forecast notes, pent-up demand for dining out remains high, with four out of 10 respondents saying they are not using restaurants as often as they would like. In the heyday of the mid-2000s, only 1 out of 4 adults expressed such unfulfilled demand.
“It’s clear that these underserved consumers have not abandoned restaurants, but rather are choosing their visits more carefully until their financial situation improves,” the forecast said.
The economy continued to grow in 2012, but it was never able to accelerate to the point where it could break the cycle of uncertainty, the report said. In the coming year, businesses face the added uncertainty of future fiscal policy, which contributes to their unease about hiring.
The financial position of most consumers is improving, with household debt declining 6 percent since 2008. And while the total household net worth remains 7 percent below a pre-recession peak, it is trending upward, the report found.
Unemployment, however, remains high in many parts of the country. California, for example, added jobs at a solid 4.2 percent rate since the national recovery began in 2010, but the Golden State’s unemployment rate was 10.1 percent in October, the third highest in the country.
In October, only seven states and the District of Columbia had more jobs than they did before the recession started.