Restaurant Sales to Rebound in 2009

Published on
September 9, 2008

Although full-service restaurants are projected to have only 1 percent nominal sales growth in 2008, sales will start picking up by early 2009, according to new research presented at the Florida Restaurant & Lodging Show in Orlando, Fla., this weekend.

"I think we are going to see a bit of lift after the election, releasing some pent-up demand. Then you're getting into the holiday season," said Melissa Wilson, principal of foodservice research and consulting firm Technomic in Chicago. Although Technomic is still working on its 2009 forecast, Wilson sees indications that early 2009 will be better for full-service restaurants, and that the uptick will start after the election.

However, the restaurant industry is still struggling in the bleak economy this year. Along with sales declines - demonstrated by the recent bankruptcies of Shells and other casual chains -full-service restaurant sales have been hit by a shift in consumer dining behavior.

"Customers are going more toward takeout and curb-side pickup, so they can forgo a tip and a beverage purchase," said Wilson.

Despite the financial struggles of some chains in 2008, there are bright spots in some full-service segments. For example, the "varied menu" segment, represented by T.G.I. Friday's, Chili's and other chains, is the fastest-growing full-service segment, with a 24 percent share of the full-service market and sales of $42.6 billion in 2007.

"They give consumers more options," said Wilson.

Asian and Italian-themed restaurants are also faring well. In the Asian segment, operators have profited by varying their menus and focusing on regional ingredients and flavors.

The Italian segment, represented by Olive Garden, Macaroni Grill and other chains, has been performing slightly above other full-service restaurant categories over the last few years. In 2006, sales grew 7.3 percent in the category. In 2007, sales growth dipped to 4 percent, and growth is projected at 3.4 percent in 2008.

However, in 2009, Technomic predicts 5.9 percent growth in the segment. "There are wine-inspired culinary innovations, and an emphasis on fresh, authentic, healthful ingredients. Lobster is also adding a fresh spin on old favorites," said Wilson.

Contributing Editor



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