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What's on the Menu for Restaurants?

R.J. Hottovy looks at five predictions for the industry over the next five years.

What's on the Menu for Restaurants?

R.J. Hottovy: In many ways, restaurants find themselves in a similar position that retailers did a decade ago with Amazon's integration of Whole Foods and other retail initiatives likely triggering a ripple effect across the grocery store industry; mobile technology's evolving consumer views on convenience and experience; and delivery and other off-premise solutions gaining widespread consumer adoption. Like the retail industry, we don't expect all industry participants to survive. We'd like to highlight five predictions for the restaurant industry over the next several years.

One, the ripple effect from online grocery will become more pronounced for restaurants. Amazon grabbed a lot of headlines when it announced that it was acquiring Whole Foods in 2017. However, to this point, we really haven't seen a meaningful impact on restaurants due to online grocery. Industry traffic was already weak before the announcement and has only modestly improved since then. However, with Amazon finding ways to bring Prime memberships into the physical stores through discounts at Whole Foods locations and other tactics that grocery stores and mass merchants will likely deploy as countermeasures, we expect that restaurant guest traffic across all tiers will remain uneven into 2019.

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