Starbucks

As one of the toughest economic years in decades comes to a close, restaurant operators have to take solace in having survived it. The recession meant scant profits, fewer customers, and constrained innovation. But the arrival of a new year is a time to look ahead. With that in mind, QSR asked several industry experts to look into the near future and describe what they saw -— the good, the bad, and the ugly -- on the horizon in 2010.

Obviously, the state of the economy will continue to determine the fortunes of the restaurant business. The unemployment rate, which is now above 10 percent, is one of the most important numbers to watch, experts say.

“The bottom line is that as people continue to be unemployed and don’t have discretionary money to spend, that’s going to affect the restaurant industry,” says consultant Bob Sandelman, who does not expect an uptick for at least the first half of 2010. “The main challenge for chains is to continue to find ways to attract customers by providing and communicating value without cheapening their image.”

Sandelman stresses the need for restaurants to stay true to themselves while finding innovative ways to lure cash-strapped consumers through the door.

“Restaurants need to not abandon what they stand for, what their key strategies are and what they’ve been known for over the years,” Sandelman says. “They need to stick with it.”

Quick serves can benefit from a certain level of unemployment, as customers who still want to eat out opt for cheaper meals. But, according to consultant Dennis Lombardi, double-digit joblessness surpassed that level.

“There’s a good rule of thumb,” Lombardi says. “When times get tough, you trade down. But when you lose your job, you trade out.”

Click HERE to keep reading at qsrmagazine.com.