Restaurant industry is holding steady

While other local industries have struggled to survive the recession and Rhode Island’s double-digit unemployment, the number of jobs in the state’s nationally recognized restaurant industry has held steady in the last decade, while wages and revenue are on the rise, according to figures gathered by Providence Business News.
According to data from the R.I. Department of Labor and Training, 40,100 Rhode Islanders worked in “food services and drinking places” as of September. In previous Septembers dating back to 2001, the number of restaurant jobs remained steady in the 40,000 range.
Wages and revenue rose in recent years, at least on paper.
In 2001, the average restaurant wage was $12,641, with total wages at $445 million; in 2005, the average wage was $13,945 with a total of $542 million; and, in 2010, $15,372 was the average weekly wage with a $584 million total payroll, according to DLT data.
Figures compiled by the R.I. Department of Revenue to track funds generated by the 1 percent meals and beverage tax show a more than $2 million increase since fiscal 2005, the first full year that meal taxes were collected.
In 2005, $17.2 million was raised by the meals tax compared to $19.5 million in fiscal 2011 that ended June 30. For the first two months of the current fiscal year, more than $4 million has been collected; if collections continue at this rate, the state is on track to raise more than last year’s $19.5 million.
However, Edinaldo Tebaldi, professor of economics at Bryant University, after reviewing PBN figures, pointed out two key economic indicators that suggest the Rhode Island restaurant industry still has hurdles to overcome. When wage data is adjusted for inflation, Tebaldi said, wages actually dropped by 1.3 percent in the last decade.
Data from the federal Bureau of Labor Statistics show that the industry grew faster nationally than in Rhode Island from 2001 to 2010, with a 7.8 percent growth rate in the state versus 13.1 percent in the country. “Yes, the industry [in Rhode Island] is growing, but not at the same pace as the nation,” he said. “The recession took a hit on us.”
According to B. Hudson Riehle, senior vice president of the research and knowledge group for the National Restaurant Association, industry sales nationwide are slated to rise 3.9 percent in calendar year 2011, going to $604 billion from the 2010 rate of $583 billion.
However unlike Rhode Island, the national industry lost jobs since the recession. A net 103,000 jobs were lost since 2008, with total employment nationwide now at 13 million workers.
And according to a Sept. 30 report from the National Restaurant Association, the restaurant performance index for the nation at 99.4 declined for the second consecutive month in August, down 0.3 percent from July. An index at 100 and above signifies expansion in key industry indicators.
“It is important to note that the industry’s August performance is a substantial improvement over the 2008-2009 period, but overall, the near-term health of the restaurant industry will depend heavily on the economy’s ability to create jobs and bolster consumer confidence,” said Riehle, who presented his data at the recent economic-outlook breakfast sponsored by the Rhode Island Hospitality Association.
Ron Blum, full-time faculty member in the hospitality college at Johnson & Wales University in Providence, pointed to national chains such as Applebee’s, Chili’s and T.G.I. Friday’s to suggest the industry is hurting. “Why are they advertising so many specials? They’re all competing for your dollar,” Blum said. He suggested competition intensified as business slackened. Even local, independent restaurants are offering fixed-price lunches and dinners to entice more customers, he noted. “Yes, people have a need to eat out and they want to eat out,” he said, “but our disposable dollar is becoming tighter and that is why every restaurant is competing to bring you in.”
Elaine Notarantonio, a professor of marketing at Bryant University and a marketing consultant, expects moderate growth in the restaurant business in the Ocean State, especially since the recession.
“People are really tired of the recession,” Notarantonio said. “They’ve been saving and saving and tightening their belts and now they’re ready to engage in small indulgences. People are patronizing places, not only for the food, but for the experience. People are spending more money on experiences and less money on ‘stuff.’ ”
Valerie Leduc, vice president of operations at Angelo’s Civita Farnese on Atwells Avenue in Providence, reported that business at the long-established eatery has been steady.
“We’re holding it together,” she said “I can’t say we’ve seen a change one way or the other, but we’re doing well. I think the fact that we have been here a long time [since 1924] and people come to us because they are familiar with us helps a lot.”
The Federal Hill restaurant employs 36 people, a number Leduc said has not changed in the last eight years – a trend reflected in the local employment statistics. &#8226

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