The recent jobs reports from the U.S. government shows that employment in the restaurant industry rose sharply in the month of October. According to news reports, "employment rose sharply in October as the industry picked up jobs lost the previous month due to hurricane-related closures." The restaurant brokers, along with the rest of the industry, see this as great news.
By the numbers, there were 85,000 jobs added during the month which took the total jobs in the restaurant industry up to 11.7 million. The data is courtesy of the U.S. Bureau of Labor Statistics.
Why such strong growth? Part of the reason was simply a rebound from industry's loss of jobs in September due to the dual hit by hurricanes. Both Harvey and Irma impacted the nation.
Restaurant sales suffered in September as well. Black Box Intelligence reported a same-store sales decline of 1.9% year over year for the September time period. The number of restaurants on the east coast affected by flooding, closures and wind damage contributed to the tough month. The hurricanes impacted traffic as well. Comparable traffic was down 4.0% in September with the West Coast outperforming in the East Coast. The impact of the hurricanes was strongest in Florida where September restaurant sales were reported down by 6.2% and traffic off by 8.8%. October has come roaring back as reflected by the jobs numbers. We are still waiting on the release of sales trending.
Why are the hiring numbers so important? The restaurant industry is a $799 billion dollar industry. Its total size is larger than 90% of the world's economies and equal four percent of the United States Gross Domestic Product. Where the restaurant sales and industry go, so goes the nation's economy. Consider that the total economy added 261,000 jobs during the month of October and more than a third of those came from the restaurant industry.
As the industry grows, it often grows from within. The National Restaurant Association reports that 90% of all restaurant managers started at entry level and 70% of all restaurants are single-unit operations. That makes them a very large component of the small businesses that fuel the United State economy.
The restaurant brokers see these statistic borne out in our interactions with buyers and seller. Those within the industry want to become owners and those who are selling, often started at the same store, before purchasing it themselves.
Where are restaurant sales headed? Our owners on the ground are telling the restaurant brokers that October was a good month for some sectors. Pizza delivery has been hurt by the fall off in NFL viewing as evidenced by the Papa John’s latest earnings disclosure. Sports bars however, may have turned off NFL but ratings for the World Series set records so that may help their sales in the month. For fast casual, we estimate the tide may be turning on restaurant sales as brands react to the market share crunch and beef up both delivery and advertising campaigns. This may be too little, too late for some, but fingers crossed, we’ll see sales settle out of negative territory for October.
Interested in buying or selling a restaurant? Reach out to the restaurant brokers at this link or visit our restaurants for sale online..