Hudson Riehle is the senior vice president of research and information services for the Washington-based National Restaurant Association.
Riehle and the restaurant association last week released the 2007/2008 Restaurant Industry Operations Report, which provides new research that can help restaurateurs plan ahead and adjust to changing economic conditions.
Riehle spoke to The Examiner about what economic challenges restaurants are facing and what food service businesses are doing to maximize profits.
How does the Restaurant Industry Operations Report help restaurants?
It helps individual restaurateurs compare their income statements to those of similar business structures.
It?s helpful for operators to access their cost structure and determine where there can be effective gains.
By monitoring and adjusting their budgets, restaurant operators can effectively respond to new challenges.
What economic pressures are affecting restaurants?
The industry is feeling the pressure from elevated energy and wholesale food prices.
[Last week?s] Producer Price Index showed that wholesale food prices increased 7.5 percent from March 2007 to March 2008.
That?s a substantial increase.
From 2006 to 2007, the increase was 7.6 percent.
Those are the highest increases in 27 years, so it?s at historic growth levels.
What are some things restaurants are doing to maximize profits?
More and more are making long-term investments in technology, such as online reservation systems, table-flow management systems and wireless ordering systems.
Some are making increased investments in training and staffing to have skilled servers and limit employee turnover.
Others are allocating more money to marketing and advertising ? through the Web, e-mail and cell phones ? to drive traffic.
Do you think we?ll soon see consumers cut back on dining out?
In March, restaurant sales volume actually increased for the first time since December 2007.
It?s important to recognize the increase reflects general inflation trends, but the increase is a testament to how essential the restaurant industry is today.
