COLUMBUS, Ohio – Dec. 18, 2017 – The Ohio Restaurant Association and the Cleveland Research Co. recently completed a survey of restaurant operators and foodservice professionals across Ohio, representing 50 companies, more than 150 locations and $22 million in total sales.
Same-store sales trends for the most recent quarter (July through September) grew an average of 2 percent, with 1.2 percent driven by customer traffic. Business trended slightly stronger in during the first part of the fourth Quarter, with traffic growth of 1.3 percent and average sales growth of 2.2 percent.
Operators in Ohio are optimistic about trends improving, and expect same-store sales to expand at a slightly stronger pace for the full year in 2018, up 2.8 percent, powered by 1.6 percent growth in traffic.
“Ohio restauranteurs in our surveys represent an array of formats including casual dining, quick-service, fine dining, fast casual, family, pubs, bars and coffee shops. This is a good indication of the health of the foodservice industry and Ohio’s economy, considering there are nearly 22,000 locations serving food in the Buckeye state,” said John Barker, President and CEO of the Ohio Restaurant Association.
“The complete transformation of retail, changing grocery industry trends and shrinking mall traffic are impacting restaurant sales, as well as rapid growth of online shopping and evolving consumer preferences. Consumers are gravitating to the best restaurant operators that offer superior hospitality, a strong brand, great food and value. We also see a growing trend by younger consumers to prefer concepts with an impressive digital footprint that includes social media, online ordering and delivery.”
Restaurant delivery and digital ordering continue to grow
According to the survey, restaurant delivery is growing 10 to 15 percent annually, with operators seeing success delivering food themselves and using third parties. Fees for delivery are 20 to 30 percent on average, and UberEATS and Grubhub hold the highest penetration in Ohio.
“Our operators are tracking the impact of technology, including delivery and digital ordering. More than 40 percent of them expect digital ordering to make up a majority of their sales three to five years from now, and many larger brands are rapidly moving in this direction with online ordering, kiosks, table-top devices, loyalty programs and more,” said Barker. “We are informing our members about how to address this with our #ORATech section on our website.”
Operators concerned about impact of rising labor wage rates
Operators in the survey are concerned about trends in certain states where the minimum wage is increasing significantly. Ohio’s minimum wage will increase to $8.30 per hour on Jan. 1, 2018 while the minimum wage for tipped workers will increase from $4.08 per hour to $4.15. The federal minimum wage is $7.25 per hour.
Half of all survey respondents said they would likely reduce labor hours if the minimum wage rose to $10 per hour; 45 percent said they would reduce the number of staff members and 30 percent would cancel new restaurant plans.
“Our operators are committed to hiring many of Ohio’s youth who are entering the workforce, but are worried that rapid escalation of the state’s minimum wage would negatively impact their prospects,” said Barker. “Most of our operators pay above the minimum wage and continuously provide reviews and incentive opportunities for staff who stay with them, work hard and excel in their duties.”
“We see thousands of examples across Ohio where entry-level workers ascend through a career to become servers, shift supervisors, cooks, chefs, assistant managers and general managers. Many rise even higher in multi-unit restaurant companies. This is one of the few industries where people can go from washing dishes to becoming a CEO.”
About the Ohio Restaurant Association
For almost 100 years, the Ohio Restaurant Association (ORA) has proudly served the Ohio restaurant and foodservice industry. As the third-largest private sector employer in the state, the ORA represents $20.9 billion, 22,023 locations and more than 574,000 employees. Founded on thought leadership, the ORA offers its members advocacy and education, a range of exclusive products and services to help with their business operations, and a commitment to promote, protect and partner with their success. For more information, visit www.ohiorestaurant.org.