Restaurant sales growth expected

Hawaii restaurateurs remain cautiously optimistic despite a prediction that sales growth in the state next year will be 4 percent higher than this year, according to a forecast by the National Restaurant Association.

The 2008 Restaurant Industry Forecast projected sales in Hawaii would reach $3.1 billion next year. Job growth in Hawaii, meanwhile, is projected to grow 6.7 percent by 2018.

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Hawaii restaurants can expect sales growth to reach $3.1 billion in 2008, a four percent growth over the previous year, according to statistics released yesterday by the National Restaurant Association.

Job growth in Hawaii, meanwhile, is expected to grow 6.7 percent by 2018.

The association's 2008 Restaurant Industry Forecast covers state-by-state sales and employment growth, plus national economic, workforce, operational, menu and consumer trends at nearly 1 million establishments across the U.S..

Nationally, restaurant-industry sales are expected to increase by 4.4 percent to $558 billion in 2008, or 0.9 percent in real growth, when adjusted for inflation.

All 50 states and the District of Columbia can expect to see restaurant industry sales and job growth in 2008, according to the forecast.

Among all the U.S. states, Nevada is expected to lead the nation in sales growth (at 6.5 percent), followed by Arizona (at 6.4 percent) and Utah (at 5.9 percent).

The highest restaurant-sales volume is expected in California, where sales are expected to reach $56.4 billion, followed by Texas (at $33.7 billion), and New York (at $28.1 billion).

California also tops the list as the largest employer of restaurant industry employees, with 1.5 million, followed by Texas (at 995,000), Florida (878,200) and New York (at 656,400).

Among challenges faced by the restaurant industry this year were the largest spike in wholesale food prices in 27 years, and growing energy and gas prices.

The cost of food and beverages today accounts for about 33 cents of every dollar of restaurant sales, while labor costs represent about one-third of restaurant sales.

The No. 1 challenge for restaurant operators in 2008 is recruiting and retaining employees. That has, no doubt, been a major challenge in Hawaii, which still has a tight labor market.

Gail Ann Chew, executive director of the Hawaii Restaurant Association, says she's cautiously optimistic about next year.

"I think we're all proud of the growth we continue to see over the years," said Chew. "But tourism projections for 2008 are flat, at best, and that will surely have an impact on our industry during the year."

Chris Colgate, Oahu regional manager for Duke's Waikiki and Hula Grill Waikiki at the Outrigger Waikiki by TS Restaurants, said business has been stable, but more competition and falling hotel occupancies has made it tougher than years past.

He estimated all the new restaurants that recently opened in Waikiki have added about 2,500 more seats to the area.

Colgate said he would personally be happy if the restaurants brought in 4 percent more in sales next year over this year. But he still felt optimistic.

Growing competition in Hawaii's restaurant industry has not staved off new ventures.

Peter Merriman, TS Restaurants' corporate chef, plans to open a second Merriman's fine-dining restaurant on Kauai in 2009, where a number of new resort projects are being built.