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P.R. restaurants generate $4B in sales, generate 60K direct jobs

Despite the challenges Puerto Rico is facing, the island’s restaurant industry maintains its role as “an important pillar in society,” generating $4 billion in annual sales and creating 60,000 direct jobs, according to a study commissioned by the Puerto Rico Restaurants Association, or ASORE.

The EAT study, which measures industry trends, also confirmed that the sector purchases more than $500 million in local products.

“For the first time, a thorough look is taken at the sector to gain in-depth knowledge of market trends, as well as the behavior and motivations of the hundreds of thousands of citizens who visit the island’s restaurants on a daily basis,” said ASORE Executive Director Gadiel Lebrón.

The Research Office, the firm in charge of conducting the study, surveyed 1,000 adult men and women between August and September of this year, all between the ages of 18-64 — a representative sample of diverse socioeconomic levels of the metro area as well as rural towns. People who had visited a limited service restaurant in the past three months and/or full service restaurants in the past six months participated in the survey, said José Alfonso, president of the firm.

“Eighty-nine percent of those who visit restaurants are middle and low-income, and they visit from quick service restaurants, to bars, ‘chinchorros,’ casual, and family restaurants, etc. It can be induced that most of them are workers, heads of household, many single parents, students and elderly people,” Alfonso said.

The study evaluated “where the current status of the industry, identifies the challenges, realities and circumstances of the clients,” said ASORE Chairman José Salvatella.

“This information is especially important at times when Puerto Rico is undergoing a process of transformation following the passage of Hurricanes Irma and María. This data is vital for us, as an industry, to delineate where we are going,” he said, adding the study confirmed “consuming food in restaurants is not superfluous for [clients,] it is a necessity, they are working people who need flexibility to consume their food.”

Among the study’s other relevant findings are:

  • Consumers are increasingly looking for both healthy alternatives in their meals and companies that are socially responsible. Among the first 10 reasons for the selection among similar restaurants, 87 percent stressed they use local products, 85 percent offer healthy alternatives, 83 percent help the community with fundraising measures and 77 percent use environmentally friendly products.
  • Optimism reigns: 33 percent of the people surveyed said they feel the island is on track, that things are improving, and that their personal economic situation is improving, so they are more willing to go out and consume. It is the first time in more than a decade that this feeling has been expressed, ASORE stated.
  • Positive balance for the quick service restaurants: So far this year, the QSRs are seeing a greater number of visits, retention and adoption in comparison to any other restaurant category (77 percent QSR vs. 38 percent of the casual dining restaurants.) This is mainly motivated by the perception of lower cost, the study showed.
  • Opportunities for full-service restaurants: To attract and retain customers, these restaurants must be more aggressive with their special offers, distinctive dishes, clean and safe environment, and quality of service.
  • Technology: More than 90 percent of citizens have access to smart and connected devices, so the industry must invest more in this resource to strengthen its quality of service, beyond posting menus, photos, and contact information.
  • Sales and Use Tax does matter: If the Tax Reform is implemented and restaurants are allowed to charge a reduced SUT, there could be an increase in the number of visits to restaurants and expenses per visit, the study confirmed.

“Eliminating the tax does not impact government revenue collections in a considerable way, but it would achieve greater social justice for people who are more vulnerable and who are, precisely, those who use more restaurants,” Salvatella said.

“It would also mean an income of $582 million, which translates into economic growth, which is what our island needs most,” he said.

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This story was written by our staff based on a press release.

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