August 5, 2016 Comments Off on Restaurants: Retail’s Main Course Views: 630 California News, Connect Classroom

Restaurants: Retail’s Main Course

CBRE’s Viewpoint U.S. Retail report dives into what is driving the success of restaurants and the food service industry’s dominant growth in the retail sector. In 2015, the U.S. Census Bureau reported that restaurants surpassed grocery store sales, marking a major milestone.

As restaurants demand more CRE space and seek to serve the changing lifestyles of their customer base, here’s a quick look at what’s happening in the segment:

    • Main Driver of Growth = Consumer Demand: lower fuel costs and reduced debt plays a part, but it’s mostly lifestyle changes, as evidenced by restaurants faring better than all retail categories since 2008, sales growth outpacing other categories, and expenditure being higher for dining than grocery stores
    • Primary spenders, perhaps surprisingly, are NOT Millennials
      • While the cohort does dine out more frequently than Gen-X and Baby Boomers, they spend between 16-26% less than the other groups, respectively
      • However, when it comes to take-out food and coffee,  Millennials  DO make the most trips and spend more than Baby Boomers
      • People ages 45-54 spend the most
    • “Fast Casual” outperforms the “Quick-Service” category, while a hybrid of Fast Casual is among the fastest growing: a focus on upscale atmospheres, healthy fresh food, and upscale branding
    • Food Trucks- National Restaurant Association estimates they’ll constitute a $2.7 billion industry by 2017
      • Lower barrier to entry to the industry, with ability to move to brick-and-mortar after success
      • 19% of current fast casuals will supplement with a food truck over the next two years

Read More at CBRE’s Retail: Restaurants Now Serving Retail Growth

For comments, questions or concerns, please contact Daniella Soloway

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