American Chain Restaurants Had a Tough Year and 2019 Looks Worse – Bloomberg

Various dishes from Small Batch Restaurant
American Chain Restaurants Had a Tough Year and 2019 Looks Worse

Higher labor, food costs could weigh down profit next year- Demanding diners want delivery, customization as habits shift

It’s not going to get much easier for the restaurant industry.

After facing stagnant sales and weak customer traffic in 2018, U.S. restaurants will encounter more headwinds next year, including rising food and wage costs, that may stall profit and hinder efforts to jump start growth.

Even the industry stalwarts are dealing with such issues in a fiercely competitive and increasingly crowded field. Starbucks Corp. is shuttering some U.S. locations amid over-saturation worries. McDonald’s Corp., the world’s largest restaurant company, has been tweaking its value offering to stay relevant in the price wars and expanding delivery with Uber Eats to spur sales.

It wasn’t all doom and gloom this year. Amid a stock market rout, restaurant stocks fared better than the broader market, bolstered by a couple of standouts like Domino’s Pizza Inc. and Chipotle Mexican Grill Inc.. 

Chipotle, while far from reclaiming its position as a Wall Street darling, is beginning to recover following a string of food-safety issues that damaged the brand.

Here’s a look at issues — both obstacles and opportunities — facing the restaurant industry in 2019. 

Click here to read complete article at Bloomberg.