Our 2019 Restaurant Industry Predictions

While researching this year’s industry predictions, I reread our posts prior to 2017 and 2018. As it turns out, we are pretty good prognosticators. But past results are no indication of future success when it comes to reading the tea leaves.

But even with the specter of failure looming we will once again offer you our unfettered opinion as to what to look forward to in 2019. As 2018 wanes, much will remain the same, but there are some things we might see disrupt the New Year. These are our predictions, so buckle up!

Political Upheaval Takes a Bite Out of the Restaurant Industry

While there won’t be any direct impact on our industry, if the New Year brings a serious constitutional crisis, the uncertainty will cause folks to be more conservative with their discretionary spending. We saw this during the 2016 election cycle as our sales dropped precipitously. While they have rebounded over the past two years, we have all seen the traffic slipping even as sales have increased.

There isn’t much you can do about it, but you should understand the impact that type of upheaval can create. We need only look at what happened to the stock market while Nixon was in the thick of the Watergate scandal. Over the final year of the scandal market sentiment dropped nearly 40%. This isn’t the market itself, but what the market thinks about its own prospects. And that can’t be good for any of our businesses.

We always survive downturns in our industry, because people will always want to gather together socially. We just don’t want anyone to be surprised by the possible outcomes. It’s up to you to weather any storm that comes along. We suggest you not make any major purchases until after the first quarter of 2019 and we can see how the dust settles with new leadership in the House and an embattled POTUS.

Off-premise Restaurant Service

From an operational stand point, none of you can afford to consider your business limited to your four walls anymore. The pressure to add delivery to your services has been non-stop in 2018. While you may have already added it, the future of off-premise services is not limited to personal delivery. Nope, in 2019 the way to really add to your business is events and catering.

While it may not be a silver bullet, catering is a wonderfully complementary sales vertical for a full service restaurant operator. Think about it, you know exactly how many guests you are serving, how much they will order, when they arrive and when they leave. That type of certainty ensures you can use quiet times in your kitchen to prep and because it’s part-time work for the servers, it’s easier to staff your gigs. It’s a method to grow sales that doesn’t disrupt your current operations in a negative way.

Now, we aren’t suggesting closing down on weekends to host weddings and Bar Mitzvahs, but we are encouraging you to seek sales opportunities that will grow your brand in your community and that are highly profitable. It takes effort to sell catering services and only you can direct it. The goal is to reach out to the right people to introduce your off-premise services.

We suggest you start with any local pharmaceutical representatives in your market. They frequently bring food to a doctor’s office as well as host continuing education programs for local medical offices. You can also host a local chamber event and highlight your catering and event hosting capabilities. Internal advertising to visiting guests is also a very effective way to develop a catering business. This much we know, the effort you put in will yield profit and grow your business in a way that works.

Rising Rates

The Federal Reserve Bank announced there will be only two more rate hikes in 2019. While that isn’t necessarily bad news, the amount of those rate hikes can also impact your business. The steady climb by rates this year has also been a part of the recovery, but it has also spurred little inflation. The thing to watch is whether the hikes are more significant in 2019. If the Feds raise rates by 25 basis points with each increase, they are concerned that the economy is overheating. However, if those increments are 10 points, then they believe the economy is at equilibrium and they don’t want to disrupt it.

The impact of raising rates can be felt in a lot of markets. For housing, each increase means that mortgage rates will likely go up, as well as the overall cost of borrowing money. Consequently, consumers may have less buying power as interest rates climb, especially if their incomes don’t follow along. It’s a very delicate game played by the Federal Reserve, although we have seen national economic growth over the past several years. The President of the United States has complained he doesn’t think they should raise their rates and his concern is political to say the least. However, he is right as far as consumer sentiment is concerned and could impact our industry.


While the prospects for 2019 are cloudy, we must always be moving forward. It seems unavoidable that we will have continued political upheaval, but if the headwinds that have punctuated the end of 2018 continue into the New Year things could turn down very quickly. Be vigilant, focus on efficiency in your operations and take on whatever comes your way. In any event, we are rooting for a peaceful and predictable 2019 and either way we’ll be here with you as you navigate.