Higher Revenues, But Lower Bottom Lines
Sometimes it is hard for the consumer to understand that even a busy restaurant may not be making money:
Sales growth to slow in ’08, with pressure on profits, IFMA says
By Sarah E. LockyerCHICAGO (Sep. 20) Despite a general economic slowdown, foodservice sales are expected to continue to grow during 2008, albeit at a slower pace than in recent years, according the International Foodservice Manufacturers Association and Technomic Inc.
[...] the higher costs of fuel, commodities and labor will likely put increasing pressure on margins.
The nominal or unadjusted sales increases for both years would be significantly higher because of inflation, which IFMA and Technomic pegged at 4 percent for both 2007 and 2008.
[...]
The forecast shows that 2008 is expected to be the fourth consecutive year of declining real growth rates for the foodservice industry as a whole, following the 2.3-percent real growth rate clocked for the trade in 2004.
Technomic presented data highlighting today’s volatile economic state, including the credit crunch[...]Still, there are signs of weakening overall job growth, soft consumer confidence and increased home foreclosures, which have intensified a broad housing downturn.[...]Cameron Mitchell, the Columbus, Ohio-based independent-group operator said that fuel prices are his largest concern. “It causes less people to come in the front door and it’s more expensive at the back door,” he said.
