Outlook 2012: Operators expect better sales, profit
More than 150 subscribers to NRN a.m. — the daily e-newsletter from Nation’s Restaurant News — helped shed light on what the industry is expecting for the year ahead. Operators answered questions on hiring, expansion plans, menu pricing and even whether this year’s Presidential election will change the political environment in Washington, and hence the economy or the consumer (hint: respondents don’t think Washington politics will ever change).
Beyond positive outlooks for sales and profit, unit growth will remain a challenge for many, the results showed, and restaurateurs were split on whether to invest in redesigns, technology or equipment upgrades in 2012.
One of the most compelling survey results: As restaurant operators continue to brace themselves against rising costs, a full 67 percent of respondents said they would increase menu prices in 2012.
NRN will explore these survey results in a series of articles this week. Today, a look at sales, profit and growth expectations.

For the second year in a row, restaurant operators expect total sales to increase over the year earlier. For 2012, 64 percent of respondents said total sales will be better than 2011, and 30 percent said sales will be about the same as a year ago. The positive results were a bit muted from a year ago, when 70 percent said they expected restaurant sales to be better than a year ago; 27.5 percent said they expected sales to be about the same as in 2010; and just 2.3 percent said they expected sales to be worse.

Profits are also expected to improve over 2011 levels, according to the survey, with a combined 88 percent of respondents expecting better or similar profits in 2012. Like sales, the results were slightly less positive than operators’ answers as they were headed into 2011. A year ago, about 65 percent of survey respondents expected improved profit at their operations in 2011 versus 2010; about 25 percent predicted profit levels of about the same; and 10.8 percent expected 2011 restaurant profit to be worse than it was in 2010.

Markedly different than the positive sales and profit projections, unit growth expectations showed that nearly half of respondents plan to open zero restaurants in 2012, and about 6 percent plan to open fewer restuarants than they opened in 2011. About 28 percent of respondents said they would open more restaurants this year than last, and about 17 percent said they have been growing consistently through the downturn. A year ago, as operators were headed into 2011, more operators were eager to open locations, as 39 percent said they would open more locations.