PHOENIX —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
In what was likely taken as an understatement by some operators attending the International Foodservice Manufacturers Association-hosted conference, keynote speaker Bill Lapp, president of Advanced Economic Solutions, said, “There are a lot of challenges ahead of us.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Lapp, pointing out that unemployment and the sliding rate of job formation have not improved, added, “In my view as an economist, [employment growth] is the No. 1 driver of same-store sales in the foodservice business, ahead of gasoline prices or [the gross domestic product] or any other statistic.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Along with the problematic housing market and large rises in foreclosures posing “a significant headwind,” Lapp said, the Federal Reserve’s lowering of interest rates has decreased the value of the dollar. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
The weak U.S. dollar has caused the energy and commodity markets to go higher, especially because China “is a commodity sponge,” he said. Besides causing crude oil and gasoline prices to rise, the prices for corn, soybeans and wheat have skyrocketed, and “a lot of this is because China is importing a lot more vegetable oils,” he said. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
From 1972 to 1981, food inflation increased 9 percent annually, Lapp said. That trend of old is showing signs of repeating itself in present times, he said. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
“This is not a one-off event,” Lapp added. “There is going to be an increase in prices to the consumer. That’s a really tough challenge when you are in the midst of the headwind we are with the slowing economy, housing in a recession, higher gasoline prices. Ultimately though, these prices have to be passed on to the consumer.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Dave Jenkins, president for foodservice at NPD Group, the market research firm, said skyrocketing prices for wheat, corn and dairy products are putting intense pressure on restaurant chains’ bottom lines as lunch and dinner customer counts are slipping. In 2007 alone, he said, dinner counts were down 2 percent as customers dealt with unease in the economy. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Operators are working closely with suppliers to control costs. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Sonny Newton, vice president of purchasing for Chick-fil-A, said: “We are looking for efficiencies. We bring in every supplier, whether it’s [of] a cup, a lid or a straw…for a two- or three-day meeting.… The relationship needs to go deep.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Operators also are working to appeal to ever-stingier consumers. Tim Ryan, president of the Culinary Institute of America, cited a study of chains that found “healthfulness” was identified as a trend that will be important to attract new business. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
“Our industry is being besieged by legislation, protests, the media, consumer groups,” Ryan said. “We have to be doing more than we are doing today.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
In the wake of trans fats being removed from menus, Ryan said, opportunities for innovation now exist in reducing calories and salt. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
“There is no question that consumer groups are teeing up salt as the next trans fat,” he said. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
In addition, Ryan said, “menu ethics” also offer opportunities, especially in the areas of locally produced foods, sustainable agriculture, organics, free-trade products, animal rights and products free of hormones and chemicals. —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Laurie Demeritt, president and chief operating officer of the Hartman Group, said: “One of the consumer definitions of ‘sustainability’ has to do with quality.… Most consumers, despite the lip service of ‘saving the world,’ are about the personal benefits, where they feel they are taking better care of their family, kids and spouses.” —Amid rising utility and commodity costs and dipping consumer spending, restaurateurs and suppliers attending the Chain Operators Exchange 2008 here Feb. 24-27 were looking for opportunities to tighten their belts and ways to lure in customers.
Andy Ford, chief insights officer for CultureWaves/Noble of Springfield, Mo., said the Internet has become the new place for savvy diners to get information about dining choices. Calling such food-focused blogs part of a new macrotrend of “friendalism,” or social networking, Ford suggested that operators check out the
