Women and Minority-Owned Restaurants Growing Sharply

Women-owned and minority-owned restaurant businesses grew at rates well above their cohorts in the overall economy in recent years, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.

In addition to providing employment opportunities for both first-time and experienced workers, the restaurant industry offers a path to entrepreneurship that no other industry can match. In fact, eight in 10 restaurant owners say their first job in the restaurant industry was an entry-level position, according to research by the National Restaurant Association Educational Foundation.

With few barriers to entry, the restaurant industry provides ownership opportunities to people of all backgrounds. This was on full display during the challenging economic environment in recent years, when women-owned and minority-owned restaurant businesses grew at rates well above their cohorts in the overall economy.

Between 2007 and 2012 (most recent data available), the number of women-owned restaurant businesses jumped 40 percent, according to data from the U.S. Census Bureau. During the same 5-year period, the number of women-owned businesses in the overall economy rose 27 percent.

As a result of these strong gains, 33 percent of restaurant businesses are majority-owned by women – up from 26 percent in 2007. Another 15 percent of restaurant businesses are equally-owned by women and men.

Minority-owned restaurant businesses also rose sharply in recent years. The number of Hispanic-owned restaurant businesses soared 51 percent between 2007 and 2012, while black- or African-American-owned restaurants jumped 49 percent. Both were above their corresponding growth rates in the overall economy.

The number of Asian-owned restaurant businesses increased 18 percent between 2007 and 2012, which was slightly below the 24 percent increase in the overall economy.

As a result of the steady growth in recent years, fully four in 10 restaurant businesses are majority-owned by minorities. In the overall economy, 29 percent of businesses are owned by minorities.

(via National Restaurant Association)

Restaurant Industry Added 47K Jobs in January

Hiring in America slowed down in January, with government data released Friday showing the economy added 151,000 jobs — less than the blockbuster growth of recent months but enough to keep the recovery on solid ground.

The data also showed a 2.5 percent spike in wages over the past year, an encouraging sign that the strength in the labor market might finally be translating into bigger paychecks. The unemployment rate also dipped to 4.9 percent, inching closer to what many economists believe is its lowest sustainable level.

Investors and policymakers are seeking reassurance on the health of the American recovery after the turmoil in global financial markets at the start of the year. Expectations for world economic growth have dimmed, and fears are rising that weakness overseas — particularly in China — could spill over onto U.S. shores.

But Richard Moody, chief economist at Regions Financial Corp., said January’s job growth indicates the slow and steady expansion since the Great Recession remains on track.

“The economy continues to muddle along, even though now and again it’s prone to a misstep,” he said.

Wall Street opened lower on the news Friday. The Standard & Poor’s 500-stock index dropped about 11 points in the first few minutes of trading, about 0.6 percent. The blue-chip Dow Jones Industrial Average fell 54 points, or about 0.3 percent, while the tech-heavy Nasdaq dropped 33 points, or 0.7 percent.

In the final months of 2015, the labor market was roaring, adding an average of 279,000 jobs each month, the fastest pace of the year. Employers went on the hiring spree even as the broader economy slowed to a crawl, dragged down by weak exports and a dropoff in business investment.

But many analysts believe that blockbuster pace is not sustainable. Though January’s job growth fell below Wall Street expectations, economists said a more modest pace was inevitable.

“Amid all the global economic turmoil and domestic market gyrations … [the data] show the U.S. is heading in the right direction,” said Beth Ann Bovino, U.S. chief economist at Standard & Poor’s Rating Service.

Once again, the retail, restaurant and health-care sectors showed the biggest job gains. Retailers added 58,000 jobs in January, while restaurants and bars hired 47,000. The health-care sector expanded by 37,000 positions.

Manufacturing delivered the biggest surprise, adding 29,000 jobs after almost no change during 2015. The industry has been hammered as a stronger dollar dampens international demand for U.S. goods, and plunging oil prices led to mass layoffs. The transportation sector shed 20,000 jobs in January after strong seasonal hiring the previous month.

But the data showed little change for several of the most distressed corners of the job market. About 2.1 million people have been out of work for six months or longer, about the same number as in June. Another 6 million have part-time jobs but would prefer full-time work. Hundreds of thousands have become so discouraged by their job prospects that they’ve stopped looking.

One key measure did show some improvement: The size of the workforce increased slightly, nudging the participation rate up to 62.7 percent after falling to the lowest level in a generation last year.

“Job creation and wage growth need to be far stronger, and they need to remain strong for a longer period of time, before the economy is close to full employment,” said Elise Gould, senior economist at the left-leaning Economic Policy Institute.

The recovery in the labor market from the depths of the Great Recession was one of the key drivers of the Federal Reserve’s decision to raise interest rates in December for the first time in nearly a decade. The move was intended to be a sign of the central bank’s faith in the health of the U.S. economy, and the Fed expected to slowly withdraw its historic support for the recovery over the next few years.

In addition, the strong dollar and low energy prices have pushed inflation well below the Fed’s target of 2 percent, the level generally associated with a healthy economy.

“Risks are tilted to the downside — it is still easier to see the [Fed] slowing down the rate of increases then speeding them up,” wrote Goldman Sachs economists Jan Hatzius and Zach Pandl, who have predicted the central bank will increase the rate three times this year.

But some Fed officials have cautioned against overreacting to movements in the market. In a speech Thursday evening, Cleveland Fed President Loretta Mester said she believes the economy remains fundamentally sound.

“Until we see further evidence to the contrary, my expectation is that the U.S economy will work through the latest episode of market turbulence and soft patch to regain its footing for moderate growth,” she said.

(via The Washington Post)

Most Consumers Not Ready to Stop Tipping

NEW YORK, Feb. 2, 2016 /PRNewswire/ -- According to Horizon Media's latest Finger on the Pulse Survey — the agency's proprietary online research community comprised of 3,000 people reflective of the U.S. population — the majority of American consumers are not yet ready to embrace tipping bans, a phenomenon that is becoming increasingly popular in restaurants across the country. Millennials and Generation Z, however, are more open to change.

Tip banning - eliminating tipping in favor of paying servers a higher wage – is a becoming a hot issue as popular restaurant owners likeDanny Meyer of Shake Shack have begun instating the practice in their eateries. The change in practice isn't limited to the coasts. National chains like Joe's Crab Shack as well as independent establishments across the nation have also joined the ranks. This "service included" approach to the bill is already common in other parts of the world, including Europe.

Yet Horizon's latest Opinion Pulse data suggest these restaurants may be getting ahead of U.S. consumers' appetite for change: 81% of adult restaurant-goers are not yet ready to welcome built in tipping. These consumers want status quo -- the decision to tip within their control and dependant on a positive service experience. For over half of these restaurant-goers, the main drawbacks of built in tipping come down to expected effects on service: 55% say they would be forced to pay the same amount no matter how good or bad service is, and 52% say it should be up to them to decide how much to pay for service.

While older consumers are hesitant to embrace the change, Millennials and Gen Z are more ready for a tipping revolution: 29% of people aged 18-34 say tipping is an outdated and unfair practice versus 18% of people aged 35-49 and 13% of people aged 50-64. Just 44% of 18-34 year olds say they are against tip being built into an item price, versus 6 in 10 of the older crowd (61% of 35-49 and 59% of 50-64). But just because they are more forward-thinking on the practice doesn't mean they think the change will happen quickly. In fact, they are more skeptical: 70% of Millennials and Gen Z say they think tipping practices will be the same as they are now in 5 years' time (versus 60% of 35-49 and 53% of 50-64).

"There are real economic and life stage realities at play for the younger crowd," said Kirk Olson, VP, TrendSights at Horizon Media. "Many Millennials still face underemployment and Gen Z-ers who've begun working are often working service jobs dependent on tips. Considering the rising popularity of Bernie Sanders' "living wage" stance among the same group, it makes perfect sense that they show greater interest in seeing tipping evolve," continued Olson.  "They're also more global and connected. They know 'service included' is the way it's done elsewhere and think it would be better for the U.S., even if they're not convinced it will become a reality any time soon."

Regardless of age, those who are interested in switching to a built-in tip structure are passionate about the benefits – primarily as a way to better predict cost; those who prefer built-in tipping are over two and a half times more likely to say the cost of the entire meal would be clearer prior to ordering (70% vs. 26% who want tipping left as is). Fairness is an important motivator as well: 62% of those who welcome built-in tipping say it would ensure the servers earn a fair and liveable wage (vs. 32% who want things to stay as is), and 45% say the current tipping structure is outdated (versus 15% among those who want things to stay as is).

"While the research suggests consumers aren't quite ready to abandon tipping per se, it does portend that in the future convenience will likely trump control," said Rich Simms, EVP, Managing Partner at Horizon Media. "Tomorrow's restaurant-goers may find that not having to think about the tip is a core benefit of the whole transaction. Hospitality brands making the change now may be at the forefront of something that will become standard practice in ten more years."

How much more are they willing to pay per menu item to have tip built in? One third (34%) say they would pay up to 15% more per item, with an additional 1 in 10 saying an increase of 18-25% would be fair in order to change tipping practices.

Finger on the Pulse empowers the agency to connect directly with 3,000 consumers, diving beneath the surface of beliefs and behaviors to uncover critical insights.

About Horizon Media Horizon Media, Inc. is the largest and fastest growing privately held media services agency in the world. The company was founded in 1989, is headquartered in New York and has offices in Los Angeles, San Diego, and Chicago. Horizon Media was chosen as 2011 Independent Media Agency of the Year by Mediapost, 2010 U.S. Media Agency of the Year by Adweek, Brandweek, and Mediaweek as well as by Ad Age and as one of the world's ten most innovative marketing and advertising companies by Fast Company in 2011. In 2012, Bill Koenigsberg, President, CEO and Founder, was honored by Advertising Age as Industry Executive of the Year. Most recently, in 2014, Bill Koenigsberg was named 4As Chair of the Board and is the first person from a media agency to hold this prestigious position in the 100 year history of the 4As, the marketing industry's leading trade association.

The company's mission is "To create the most meaningful brand connections within the lives of people everywhere." By delivering on this mission through a holistic approach to brand marketing, Horizon Media has become one of the largest and fastest-growing media agencies in the industry, with estimated billings of over $5.3 billion and over 1,200 employees.

The company is also a founding member of Columbus Media International, a multi-national partnership of independent media agencies. For more information, please visit horizonmedia.com.

(via PRNewswire)

Super Bowl 50 to Boost San Francisco's Restaurant & Hospitality Industry

NEW YORK, Feb. 1, 2016 /PRNewswire/ -- According to PwC US, direct spending by the National Football League (NFL), businesses, visitors, and media on area lodging, transportation, food and beverage, entertainment, business services, and other hospitality and tourism activities related to Super Bowl 50 is expected to total more than $220 million. This estimate is based on a proprietary analysis that considers characteristics unique to this year's event such as the participating teams, attributes of the Bay Area, national economic conditions, and scheduled corporate and other ancillary activities.

Excluded from the analysis is the so-called "multiplier effect," which accounts for "indirect" impacts, such as a concession company's purchase of goods from local producers and manufacturers, and "induced" impacts, which occur when the income levels of residents rise as a result of increased economic activity and a portion of the increased income is re-spent within the local economy.

The following chart illustrates the estimated direct spending associated with the event, dating back to Super Bowl XXXVII in San Diegoin 2003, the last Super Bowl hosted in California.

"In addition to the Bay Area's core destination offerings, hubs of Super Bowl programming located throughout the Bay Area will provide visitors with a bevy of activities to participate in throughout the week leading up to the game," said Adam Jones, Director, Sports and Tourism Sector, PwC US.  "Although the Pro Bowl is rotating back to Hawaii, Super Bowl City will open earlier than in years past to coincide with the NFL Experience, and Media Day will be held a day earlier, all of which will expand the average length of stay and overall impact."

The 50th edition of the Super Bowl marks the return of the event to the west coast's Bay Area for the first time in the modern era and toCalifornia – which is hosting its 12th game including the inaugural event in 1967 – after a 12 year absence. The return to California, specifically the San Francisco Bay Area, will allow regular attendees of the Super Bowl to experience fresh sights and attractions; yielding a level of direct spend which, when combined with relative destination costs, should continue the upward trend that started following Super Bowl XLVI in Indianapolis in 2012.

Continued Jones, "The Bay Area, like New York/New Jersey which hosted Super Bowl XLVIII in 2014, is home to a high concentration of businesses that activate events and activities around the Super Bowl. With the game in the Bay Area, the local economy will retain dollars that would otherwise be exported to other cities, resulting in what is projected to be the event's highest direct spend level, on a nominal basis, and the second largest inflation-adjusted output next to Super Bowl XLI in South Florida in 2007."

For more information visit www.pwc.com/us/sports

About PwC At PwC, our purpose is to build trust in society and solve important problems. We're a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

(via PR Newswire)

8 in 10 Diners are Against Eliminating Tips

Danny Meyer was one of the first restauranteurs to announce the elimination of tips at his establishments. The 'Hospitality Included' trend has been gradually picked up by other owners and operators in the industry as well.

Although restaurants are trying to change the status quo, diners seem to still prefer the standard practice of leaving gratuity.

Recently, Horizon Media surveyed 3,000 people about tipping. The study found that 81% of restaurant patrons aren't ready to forgo the "established" practice of tipping. Responders said that they preferred having the choice to tip based on the quality of service provided. They weren't very fond of the gratuity-included idea, which they believed would lead to poor service.

However, results showed that younger people were actually more accepting of the new trend. 29% of people ranging from the ages of 18 to 34 thought tipping was dated, as compared to 13% of those aged between 50 to 64.

The remaining 20% claimed to be supportive of the change. 34% said they would pay up to an additional 15% per dish. 10% percent were a little more generous and said that 18 to 25% would be a reasonable amount.

Kirk Olson of TrendSights at Horizon Media said younger diners were more welcoming of the change because they understand the challenges of financial burden. He said, "Many Millennials still face underemployment and Gen Z-ers who've begun working are often working service jobs dependent on tips. Considering the rising popularity of Bernie Sanders's 'living wage' stance among the same group, it makes perfect sense that they show greater interest in seeing tipping evolve."

Olson mentioned how millennials are more aware that tipping is no longer accepted in other parts of the world, like in Europe. They think that restaurants with service included into the prices of meals would just be a better practice in the US.

(via Eater)

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