Though economic analysts continue to fret over the financial health of consumers, they need not worry about their appetites.
Despite higher energy prices, lower home values, increased borrowing costs, even the spread of the $40 entrée — their willingness to pay someone else to do their cooking remains undiminished.
So it shouldn't be surprising that now more dining establishments want to put Thanksgiving dinner on their menus.
“October was the overall single highest volume month on record for the industry,” said Hudson Riehle, senior vice president of research for the National Restaurant Association, referring to the group's latest data release. He credits the underlying strength of the economy for the continued growth in restaurant and related prepared-food sales, which he expects to reach a record $511 billion this year. That, according to Riehle, would represent roughly 4 percent of the U.S. gross domestic product. He adds, “This will be the 15th consecutive year of sales growth even after adjusting for inflation.” In fact, the industry’s share of the consumer’s prepared food dollar is currently 46.7 percent—this includes restaurants, catering, takeout and banquet meals. By means of comparison, it was 25 percent in 1955.
“Over the past decade, prepared food has become a more essential part of the American consumer’s lifestyle. Even in periods of external influences, like higher gas prices, the increasing demand for convenience wins out,” says Riehle.
Take-out turkey day?
That quest for convenience has even put Thanksgiving, probably single most home-cooked days of the year, on the table for the industry.
It starts with Thanksgiving Eve which has become big business for bars given it is a night when friends home from wherever, and free of kitchen duty, can gather and catch up and do so in large number. But for restaurants the big day itself is becoming more of a factor, which at first seems odd since many restaurants are still closed on Thanksgiving.
“Thanksgiving is a surprisingly popular day for dining out,” says Ann Shepherd, senior director of consumer marketing for OpenTable, the online reservation service. Though it may not beat out the average Saturday night, OpenTable.com says it is the busiest weekday in November. The National Restaurant Association estimates 11 percent of Americans now dine out for the holiday.
Mimi’s Café, which has 105 restaurants in eighteen states, reports the day is one of the busiest of the year, second only to Mother’s Day for its chain.
But those restaurant operators who are closed for the holiday may also be giving thanks for their slice of the Turkey Day business. The Association reports 53 percent of time-starved Americans, along with those lacking — or just slacking — in culinary skills will be serving restaurant-prepared takeout items for part or all of their own holiday meals.
“Eating out on Thanksgiving is becoming more popular,” confirms Kevin Brown, president and CEO of Lettuce Entertain You Enterprises, the Chicago-based restaurant operator with 73 restaurants nationally. Lettuce’s Mighty Nice Grill in Chicago actually will be serving Thanksgiving dinner this year to roughly 700 patrons. “But our restaurants, and our Wildfire restaurants in particular, do a big business in take-out pies and side dishes ahead of the holiday,” Brown said.
The post-Thanksgiving outlook is even merrier.
“Pre-holiday bookings have been good, and all indications are it will be a strong holiday season for us,” says Brown.
Traditionally, the November to December season is the second busiest time of the year, with the month of August, when tourism peaks, only bigger, according to the National Restaurant Association.still retains top honors.
“Restaurants typically see a disproportionately high percentage of their annual business in the weeks between Thanksgiving and New Years,” confirms Shepherd. This year promises to be no different. OpenTable.com expects to seat roughly 2 million diners in coming weeks, substantially more than its monthly average of 1.3 million.
The nation’s employers are also expected to add heavily to the activity and run up tabs this season. According to its Annual Survey on Corporate Holiday Celebrations by executive search firm Battalia Winston International, 94 percent of businesses will be hosting a holiday celebration this year with 77 percent of those occurring away from the office. The week of December 11 looks to be a particularly festive one according to the survey.
“People seem to feel pretty good this year, but it is also the time of year to reconnect with family and friends and to thank business associates and employees for the part they played in it,” says Brown. “Restaurants make it easy to celebrate. We always have a party going on and toward the end of the year, people seem even more willing to join it.”
So if consumers are late to the malls in coming weeks, it may just be they are still waiting to be seated, in slow take-out lines or just lingering over pie and coffee partaking in the ongoing seasonal celebration.