The long lines that formed when Bruxie Gourmet Waffle Sandwiches opened its third Orange County location in May, at the Plaza El Paseo Town Center in Rancho Santa Margarita, drew curious stares from nearby tenants, shoppers and diners who frequent the retail center. At its peak, nearly 100 people stood in line.
Bruxie has drawn big crowds since day 1.
Such sights have been rare since the beginning of the economic downturn that began in late 2007. The site’s two former tenants, OC Burgers and Tommy Pastrami, each came and went within a year; and two other restaurant sites located about a half-mile away have been vacant for well over a year. These contrasting views provide a glimpse into both the good and troubled conditions of the restaurant industry.
“When restaurant operators look out to the upcoming time frame, 2013 and beyond, they see an environment that will be positive with sales growth, although it may not be as strong as they had hoped for and certainly not as strong as it was prior to the recessionary period,” says Hudson Riehle, senior vice president of the National Restaurant Association’s Research and Knowledge Group.
As with other industries, the economic crisis that began five years ago continues to take a toll on restaurant owners. Guest traffic has declined, and bill tabs are lower as consumers continue to respond to tough economic realities. More than 10 percent of Californians remain unemployed. That number jumps to as high as 24 percent when the underemployed – those seeking additional work to make ends meet – are added.
In turn, household income, which strongly correlates to the sales growth of the restaurant industry, has decreased. According to the UCLA Anderson Forecast, the median household income in 2011 was 8.1 percent lower than in 2007 and 8.9 percent lower than the median household income peak in 1999.
Despite long-lasting economic challenges, the restaurant industry remains a strong force in the national, state and local economies.
Big national numbers
“In 2012, restaurant industry sales nationwide will reach a record high of $632 billion,” says Riehle. “That’s up three and a half percent over last year, [marking] the third consecutive year of growth for the restaurant industry.”
According to statistics from the National Restaurant Association, nearly 1 million restaurants span every corner of the country, from small tucked-away towns to large metropolitan areas. These locations serve 130 million Americans each day and employ 12.9 million people, representing nearly one in 10 Americans in the country. The job growth in the restaurant industry, a major U.S. employer at the national, state and local levels, has outpaced the national economy for 12 consecutive years.
California, referred to as the juggernaut of restaurant sales, continues to be ranked No. 1. This year, sales are projected to reach $63.8 billion. In 2010, the state was home to 62,794 eating and drinking locations. Similar to the national numbers, the food and beverage industry employs 10 percent of California’s working population, a total of 1.445 million people.
Despite a notable number of restaurant closures seen around Orange County, the number of eateries has continued to rise throughout the five-year economic downturn. At the end of 2011, there were 8,106 “open foods or food preparation” locations – ranging from donut and ice cream shops with sit-down seating to five-star restaurants – according to statistics from the Orange County Health Care Agency’s Environmental Health Division, which issues yearly health permits to restaurant owners. This figure represents a 3.6 percent increase in the category since December 2007.
An increase has also been seen in the number of restaurants lauded by the county’s Award of Excellence program. The award is given to food facilities that demonstrate excellence in hygiene and cleanliness. Site inspections, which are unannounced, occur three times a year.