NRA (National Restaurant Assciation Forecast 2010

2010

Forecast
Restaurant Industry

Profitability and Entrepreneurship
Jobs and Careers
Food and Healthy Living
Sustainability and Social Responsibility

America’s Restaurants
Uncovering opportunity
in a new economy

SHARED VISION of the National Restaurant Association,
National Restaurant Association Educational Foundation and State
Restaurant Associations:
We will lead America’s restaurant industry into a new era of prosperity,
prominence and participation, enhancing the quality of life for all
we serve.

MISSION MISSION
We exist to help our members As the philanthropic foundation
— the cornerstone of their of the National Restaurant
communities — build customer Association, we exist to enhance
loyalty, rewarding careers and the restaurant industry’s service
financial success. to the public through education,
community engagement and the
promotion of career opportunities.

WE CREATE VALUE
for our members in five ways:
• Advocacy and representation
Building and sustaining positive public opinion and a favorable political
environment.
• Tools and solutions
Helping grow revenues, increase profitability and develop employees.
• Education and networking
Providing opportunities to connect and learn from each other.
• Research and insights
Anticipating and preparing for emerging trends that could impact
restaurants.
• Responsible stewardship
Providing thought leadership to inspire community involvement and
impact.

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Inside
The National Restaurant
Association is pleased
to provide the 2010
Restaurant Industry
Forecast, our 41st annual
profile of restaurant-
industry opportunities
and challenges for
the year ahead. The
research and insights are
based on analysis of the
latest economic data, as
well as extensive surveys
of restaurateurs and
consumers.
The National Restaurant
Association will closely
monitor incoming industry
and economic data in
the months ahead and
provide updates to this
Forecast at
www.restaurant.org/
research. 5 19 23
The 2010 Restaurant

3 5 19
Industry Forecast
was prepared by the
National Restaurant
Association Research
and Knowledge Group: Overview Profitability and Jobs and Careers
Hudson Riehle Restaurant sales are Entrepreneurship The restaurant industry
Senior Vice President, projected to reach a record In an industry where profit bolsters the U.S. economy.
Research and Knowledge high in 2010, despite the margins are lower than Its 12.7 million employees
Bruce Grindy challenging economic others, operators are represent more than 9
Chief Economist backdrop. Sales are expected concerned about managing percent of the nation’s
to total $580 billion, up 2.5 costs, access to credit and workforce. Research shows
Molly Altman percent from 2009. other economic pressures. the industry’s workforce will
Research and Inventiveness will shape expand by 1.3 million this
Knowledge Specialist
operators’ success. decade.

Linda Busche
Denise Roach
Editors

Tim Smith
Art Director
23
Food and Healthy
29
Sustainability and
33
Appendix:
Living Social Responsibility State Information
Nutrition and food safety Economic challenges haven’t Get data on key economic
trends are expected to be stopped restaurants’ phil- indicators for each state,
center of the plate this year. anthropic or conservation plus projections for 2010
1200 17th St., NW Restaurants are updating efforts. Restaurants recognize state restaurant sales and
Washington, DC 20036 menus to reflect nutrition the vital link between their foodservice employment
(800) 424-5156 policy and trends, consumer businesses and communities. over the next decade.
www.restaurant.org
desires for variety and They participate in commu-
© 2010 National quality, and chef innovations. nity service, contribute to
Restaurant Association charitable causes and work to
conserve the environment.
ISBN 1-931400-68-7

www.restaurant.org | National Restaurant Association | 1

2010 Restaurant Industry Forecast

Restaurants
Small businesses with a large impact
on our nation’s economy

Sales $580 billion
n Restaurant-industry sales are forecast
Locations 945,000 to advance 2.5% in 2010 and equal
4% of the U.S. gross domestic product.
Employees 12.7 million
n Restaurants will provide more than
Restaurant-industry 70 billion meal and snack occasions
share of the food dollar
49% in 2010.

n On a typical day in America in 2010,

Restaurant more than 130 million people will
be foodservice patrons.
Sales n The overall economic impact of the
1970–2010 $580.1
restaurant industry is expected to
Food-and-drink sales exceed $1.5 trillion in 2010.
(Billions of Current Dollars)

$379.0 n Every dollar spent by consumers in
restaurants generates an additional
$2.05 spent in the nation’s economy.
$239.3

n Every additional $1 million in
$119.6 restaurant sales generates 34 jobs
$42.8 for the economy.

n Eating-and-drinking places are mostly
1970 1980 1990 2000 2010*
small businesses. Ninety-one percent
* Projected
have fewer than 50 employees.

2 | National Restaurant Association | www.restaurant.org

2010:
Uncovering Opportunity
Sales to reach record high amid economic challenges

R
estaurants are poised to uncover elegant ambience and cuisine at fine- instead of cooking and cleaning up.
new business opportunities in dining establishments, the newest latte With nine in 10 adults saying they
2010. Industry sales are projected at the corner coffee shop, the relaxed enjoy going to restaurants, the industry
to reach a record high this year, despite atmosphere of a casual-dining concept. over the long term will continue along a
the most challenging economic backdrop Indeed, a new Association survey reveals path of growth.
in decades. The 2010 sales projection: $580 that nearly four in five consumers believe
billion, up 2.5 percent from 2009. going to restaurants with family or friends Challenges ahead
However, when adjusted for inflation, gives them opportunities to socialize and It’s evident that challenges remain.
restaurant industry sales are expected to is a better way to use their leisure time Managing costs will be important, but the
decline 0.1 percent in 2010, according to
National Restaurant Association research.
This sales projection represents an unprec-
edented three straight years of real sales Adding it all up: $580.1 billion
declines but an improvement over the Projected restaurant-industry sales in 2010
past two years. The Association estimates
that restaurant-industry sales declined 1.2 Commercial Restaurant Services $530.4 billion
percent in 2008 and 2.9 percent in 2009, in
inflation-adjusted terms. n Eating places*: $388.5 billion
The National Restaurant Association’s n Bars and taverns: $18.8 billion
identifies numerous opportunities to n Managed services: $40.9 billion
build business, attract and retain customers
and control costs, despite the economic n Lodging places: $26.9 billion
challenges.
n Retail, vending, recreation, mobile: $55.2 billion
As the industry increasingly offers
consumers options to meet their varying Noncommercial Restaurant Services $47.6 billion
desires, restaurants remain essential to
American lifestyles. *Eating places include fullservice restaurants and

Some things they’re looking for: speedy
limited-service (quickservice) restaurants, cafeterias and Military Restaurant Services $2.1 billion
buffets, social caterers, and snack and nonalcoholic
drive-through at quickservice restaurants, beverage bars.


FORECAST Overview 2010 Restaurant Industry Forecast

Job growth
The restaurant industry will employ about
Managing costs will be important, 12.7 million people, or 9 percent of the
workforce, in 2010. And the industry
but the extent of the industry’s upturn continues to grow.

depends largely on consumer confidence, Over the next decade, restaurants are
expected to add 1.3 million jobs. That
which is critical to long-term success. means restaurants could employ 14 million
people by 2020. As the industry adds
more jobs, recruitment and retention will
re-emerge as operators’ No. 1 challenge in
the years ahead.
Operators also recognize the
Restaurant Industry importance of undertaking environmen- What’s ahead
Share of the Food Dollar tally friendly practices — not just to This year has its challenges, but the future
manage costs but to build business. is positive. Consumers forced to cut back on
While the economy might have affected spending in the past two years continue to
operators’ abilities to fund new green place a priority on dining out.
25% 49% initiatives, industry intent and consumer Although they say they aren’t dining
interest are strong. That shows sustainability out as often as they like, they continue to
1955 Present efforts will remain a long-term trend and patronize restaurants they believe offer
not a fad. value for their money. They also show
interest in eating locally sourced food
extent of the industry’s upturn depends State variations and seek an increasing array of ethnic
largely on consumer confidence, which is Demographics is destiny. Sales will cuisines.
critical to long-term success. And unsteady improve sooner and more significantly for Consumers’ pent-up demand to dine
job growth is expected to further restaurants in some parts of the country. out more often, combined with myriad
challenge overall economic growth. Population, employment and income consumer incentives, likely will nudge
Until personal disposable income growth vary by region, and changes in consumers into America’s 945,000
increases and unemployment levels fall, those demographics will continue to restaurants and help restaurants begin to
economic recovery is expected to be pro- affect restaurant sales. recover and add steam to the economy.
longed and patchy. Although the economy
shows signs of recovery, improvement isn’t
expected until later in the year.
To help spur consumer confidence,
operators must take steps to provide value
Promising trends
to guests. Smart operators will look to
build sales by marketing healthful menu
items and responding to consumer demand
for convenience and variety. Growth
65 Percent of adults who say their favorite restaurant foods provide flavor
and taste sensations they can’t easily duplicate in their home kitchens.

opportunities include delivery and other
off-premise options, cooking classes and
other interactive activities, and new media
to reach new and returning guests.
44 Percent of adults who say restaurants are an essential part of their
lifestyle.

40
Social media, such as networking and
Percent of consumers who say buying restaurant, take-out and
photo/video sharing sites, will become delivery meals make them more productive.
more critical to restaurant marketing this
year. A good plan and solid understanding
of those tools can help operators mitigate
the weak environment. It’s clear that
“word of mouth” has moved online, and
35 Percent of adults who say they don’t eat on-premises at restaurants
as often as they would like on a weekly basis.

more consumers use the Web to browse
menus, make reservations and get
recommendations from other diners. 29 Percent of consumers who say take-out food is essential to the way
they live.


Profitability
and Entrepreneurship
Inventiveness will shape operators’ success

Overview
In an industry where profit
margins are lower than
others, rising costs and
economic pressures are
especially challenging for
restaurants. According
to National Restaurant
Association research on
quickservice and fullservice
trends, operators in all
segments are focused on
attracting new guests, rising
above the competition and
providing value.


FORECAST Operating Environment 2010 Restaurant Industry Forecast

percent of adults said they were
more concerned about the state of the
economy compared to the same time in
the previous year. Sixty-four percent of
adults said they were more concerned

Gradual recovery about the availability of jobs in their
communities, while 47 percent expressed
more concern about their household

expected financial situations.
Restaurants felt the brunt not only
of a weak domestic economy but also of
As economy emerges from recession, restaurateurs
weaker international tourism. Spending by
cautiously optimistic about 2010 international visitors plunged 16 percent
in the first 10 months of 2009 compared
to the previous year, according to the
Commerce Department. International
arrivals to the United States through

W
ith the worst of the economic ment base between January 2008 and October 2009 dipped 7 percent below
downturn behind them, December 2009, and the unemployment year-ago levels.
restaurant operators likely rate more than doubled to over 10 percent Travelers and visitors are a key
will see a gradually improving operating from 4.4 percent. customer demographic for restaurant
environment in 2010. The second half of the Beginning in the first quarter of 2008, operators. They represent an average of
year is likely to be stronger than the first. the gross domestic product fell in five 40 percent of fine-, 25 percent of casual-
of six quarters. The GDP represents the and family-dining, and 15 percent of
2009 in review value of goods and services produced in quickservice sales, according to Association
The nation’s economic slump, the worst the United States. Although GDP grew research.
since the Great Depression, continued in modestly in the third quarter of 2009,
2009. More than 7.2 million net jobs were likely marking the “official” end of the Outlook for 2010
eliminated in the “Great Recession” of recession, job losses continued through This year likely will be a period of gradual
2008 and 2009, surpassing the 7.1 million the end of the year — as did consumers’ economic recovery, as the labor market
jobs lost in the 1981/82, 1990/91 and uncertainty about the economy. struggles to catch up with rising economic
2000/01 recessions combined. The nation In the National Restaurant Associa- output. Growth is expected to return in
lost more than 5.2 percent of its employ- tion’s December 2009 consumer survey, 71 earnest in the second half of 2010.

Economic growth Income growth Job growth
GDP expected to grow in 2010 Disposable personal income growth Job growth will resume in 2010, but
Real growth in GDP to improve in 2010 average employment levels will remain
Real growth in disposable personal income below 2009
U.S. job growth

2.5% 4.0%
3.6% 3.3% 3.4%
3.1%
2.5% 2.7% 2.5% 1.2%
2.1% 2.4% 2.2%
1.8% 1.7% 1.8%
1.1% 1.3% 1.1% –0.8%
1.0% 1.1%
0.4% 0.5%
0.0%

–0.3% –0.4%
–1.1%

–2.5%
–3.7%
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09* ‘10* ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09* ‘10* ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09* ‘10*
*projected *projected *projected
Source: Bureau of Economic Analysis, National Source: Bureau of Economic Analysis, National Source: Bureau of Labor Statistics, National Restaurant
Restaurant Association Restaurant Association Association


FORECAST Operating Environment

• Jobs: The national unemployment rate income — a key indicator of restaurant- thought they would be worse than in
will remain high in the first half of 2010 industry performance — is projected to 2009, and 52 percent say they expect their
before slowly declining in the second half. increase 1.2 percent in 2010. This would household financial situation to be about
The national economy is expected to add be the largest increase since 2007, but a the same. The numbers vary significantly
about 750,000 jobs during 2010, mostly in modest gain by historical standards. across age groups, with younger adults
the second half of the year. generally more optimistic.
Younger consumers
• GDP: Building on the momentum estab- more optimistic
lished in the second half of 2009, national On the whole, consumers are cautiously Food prices expected
output is projected to rise moderately this optimistic that their household financial to resume growth in 2010
year. The Association expects real GDP to situations in 2010 will be better or about
Wholesale food costs likely are on their
increase 2.5 percent, up from a 2.5 percent the same as they were in 2009. In the
way up this year. Food costs are one of
decline in 2009. It would mark the Association’s December 2009 consumer
the most important line items for res-
strongest gain in four years. survey, 32 percent of adults say they
taurants, representing roughly 33 cents
expect their household financial situations
of every dollar in restaurant sales. For
• Income: Real disposable personal to improve in 2010. Just 16 percent
that reason, fluctuations in food costs
significantly impact restaurants’
bottom lines. After six consecutive years
Operators expect economic improvement of steady gains in wholesale food
prices, average wholesale prices fell
Restaurant operators surveyed by the National Restaurant Association in December 2009
were somewhat optimistic about the economy’s direction. nearly 4 percent in 2009. Yet food prices
remained elevated, as 2007 and 2008
Restaurateurs’ outlook for general economic conditions in first half of 2010,
by industry segment were the largest spikes in nearly three
decades.
28% 29%
27% 27%
25%
22% 23%
20% 21%

11%

Family dining Casual dining Fine dining Quickservice Fast casual

Expect economic conditions in six months will be …
n Better than December 2009
n Worse than December 2009 2010 commodity
Source: National Restaurant Association, Restaurant Industry Tracking Survey, December 2009 price outlook
Projected growth rates for primary
market prices (high-low scenarios)

International tourism dips 2008 2009 2010
Restaurateurs were likely affected in 2009 by a drop in interna- Beef 1% –10% 4% to 12%
tional arrivals to the United States. The dip in international visits
was the first decline in six years and the largest since 2002. Pork 2% –15% 5% to 13%

Broilers 4% –3% –3% to 5%
Percent change in international arrivals to the United States
Turkeys 7% –9% –1% to 7%
11% 11%
8% Eggs 12% –22% –1% to 7%
6% 6%
4%
Milk –4% –30% 28% to 35%

Cheddar 9% –32% 25% to 31%
–4%
–8% –7%
Butter 7% –16% 18% to 27%
–12%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YTD Source: U.S. Department of Agriculture, November
2009 projections
Source: U.S. Department of Commerce; 2009: YTD represents year-to-date growth through October 2009


FORECAST 2010 Sales Projections 2010 Restaurant Industry Forecast

Breaking down the
numbers
restaurants experiencing sales growth
Get a detailed look at sales projections by segment, as
of 1.2 percent and quickservice growth
well as historical data projected at 3 percent. Although real sales
growth (sales adjusted for the impact of
inflation) is projected to be -0.1 percent
for the industry overall, some segments of
the industry will see higher growth rates.

T
he restaurant industry is expected remaining challenges. The National The charts on the following pages
to experience positive sales growth Restaurant Association’s 2010 Restaurant examine the industry’s sales-growth record
in 2010. Restaurateurs’ outlook for Industry Forecast projects that industry over the past 40+ years, as well as the
2010 will be boosted by a better operating sales will grow 2.5 percent in 2010 to expected 2010 performance of key
environment but tempered by substantial reach $580.1 billion, with fullservice restaurant-industry segments.

HISTORY

40 years of restaurant industry sales
This chart shows sales growth for the restaurant industry since 1971, when the National Restaurant Association began issuing its annual
forecast. The chart shows growth in the number of dollars spent each year in restaurants as well as real (inflation-adjusted) sales growth.

12.8%
12.4%
11.8%
11.5%
12.3%
11.6%
9.9%
10.8%

8.3%
7.7% 9.2% 8.0% 7.9%
8.4% 7.2%
6.6%
6.1% 6.2%
6.9% 5.8% 5.8%
5.3% 5.3%5.5% 5.3% 5.3%
5.1% 5.0%
5.0% 4.7% 4.6% 4.6% 4.8%
4.4% 4.5%
4.4% 4.2% 4.2%
4.2% 4.0% 2.5%
3.8% 3.8% 4.7%
3.4% 3.2%
3.0% 3.0% 3.2% 3.0%2.9% 3.0% 3.0%
2.8% 2.9%2.7%
2.5% 2.3%
2.1% 2.1% 2.0% 2.1% 2.2%
1.6% 1.6% 1.5% 1.6%
1.2% 1.2% 1.2% 1.0%
0.8%
0.5% -0.7%

-0.2% -0.1% -0.2%
-1.2% -0.1%

-2.9%

1971 1975 1980 1985 1990 1995 2000 2005 2010

n Current dollar growth n Real (inflation-adjusted) growth
*Growth rates are estimated for 2006 to 2008 and projected for 2009 and 2010. Providing final estimates for restaurant-industry sales from previous years is an ongoing process.
The National Restaurant Association’s Restaurant TrendMapper offers updated sales estimates as they become available. Visit www.restaurant.org/trendmapper to learn more.
Source: National Restaurant Association


FORECAST 2010 Sales Projections

INDUSTRY
SEGMENTS Footnotes:

What’s in store for
1 Data are given only
for establishments
with payroll.

restaurant industry sales
2 Waiter/waitress ser-
vice is provided, and
the order is taken
while the patron is
Restaurant-industry food and drink sales: Projections for 2010 seated. Patrons pay
after they eat.
3 Patrons generally or-
‘09-’10 % der at a cash register
2009 projected 2010 projected ‘09-’10 % Real growth or select items from
a food bar and pay
F&D sales ($000) F&D sales ($000) change change before they eat.
4 Formerly commercial
GROUP I COMMERCIAL RESTAURANT SERVICES1 cafeterias.
EATING PLACES 5 Food and drink
sales for non-payroll
Fullservice restaurants2 $181,992,532 $184,176,442 1.2% -1.5% establishments are
Limited-service (quickservice) restaurants3 160,035,527 164,836,593 3.0% 0.4% projected to total
$13,303,516,000.
Cafeterias, grill-buffets and buffets4 7,505,948 7,671,079 2.2% -0.4%
6 Also referred to as
Social caterers 6,784,828 7,090,145 4.5% 1.9% onsite foodservice
and food contractors.
Snack and nonalcoholic beverage bars 24,156,717 24,736,478 2.4% -0.2%
7 Includes drug- and
TOTAL EATING PLACES $380,475,552 $388,510,737 2.1% -0.5% proprietary-store
Bars and taverns 18,474,870 18,844,367 2.0% -1.1% restaurants, general-
merchandise-store
TOTAL EATING-AND-DRINKING PLACES $398,950,422 $407,355,104 5 2.1% -0.6% restaurants, variety-
MANAGED SERVICES6 store restaurants,
food-store restau-
Manufacturing and industrial plants $6,685,577 $6,652,613 -0.5% -3.1% rants and grocery-
store restaurants
Commercial and office buildings 2,520,897 2,565,265 1.8% -0.8% (including a portion
Hospitals and nursing homes 4,735,380 5,052,651 6.7% 4.1% of delis and all
salad bars), gasoline-
Colleges and universities 12,911,951 13,648,985 5.7% 2.9% station restaurants
Primary and secondary schools 5,564,018 5,862,847 5.4% 2.8% and miscellaneous
retailers.
In-transit restaurant services (airlines) 2,046,530 2,061,110 0.7% -2.0%
8 Includes movies,
Recreation and sports centers 4,831,185 5,025,324 4.0% 1.3% bowling lanes,
TOTAL MANAGED SERVICES $39,295,538 $40,868,795 4.0% 1.3% recreation and sport
centers.
LODGING PLACES 9 Includes sales of hot
Hotel restaurants $25,368,042 $26,534,972 4.6% 1.9% food, sandwiches,
pastries, coffee and
Other accommodation restaurants 394,970 407,610 3.2% 0.5% other hot beverages.
TOTAL LODGING PLACES $25,763,012 $26,942,582 4.6% 1.9% 10 Business, educa-
Retail-host restaurants7 29,480,534 30,935,713 4.9% 2.3% tional, governmental
or institutional
Recreation and sports8 12,212,322 12,517,759 2.5% -0.2% organizations that
Mobile caterers 646,363 635,116 -1.7% -4.3% operate their own
restaurant services.
Vending and nonstore retailers9 10,966,372 11,096,872 1.2% -1.4% 11 Includes indus-
TOTAL — GROUP I $517,314,563 $530,351,941 2.5% -0.1% trial and commercial
organizations,
seagoing and
GROUP II NONCOMMERCIAL RESTAURANT SERVICES10 inland-waterway
Employee restaurant services11 $417,317 $426,243 2.1% -0.4% vessels.

Public and parochial elementary, secondary schools 6,011,356 6,143,606 2.2% -0.4% 12 Includes voluntary
and proprietary
Colleges and universities 6,169,059 6,083,266 -1.4% -4.5% hospitals; long-term
general, TB, nervous
Transportation 1,754,173 1,829,948 4.3% 1.7% and mental hospitals;
Hospitals12 14,534,908 15,225,316 4.7% 2.2% and sales or com-
mercial equivalent to
Nursing homes, homes for the aged, blind, orphans and employees in state
the mentally and physically disabled13 6,963,721 7,144,778 2.6% 0.4% and local short-term
hospitals and federal
Clubs, sporting and recreational camps 8,479,792 8,554,233 0.9% -1.9% hospitals.
Community centers 2,041,828 2,139,836 4.8% 2.6% 13 Sales (commercial
TOTAL — GROUP II $46,372,154 $47,547,226 2.5% -0.1% equivalent) calcu-
lated for nursing
TOTAL — GROUPS I AND II $563,686,717 $577,899,167 2.5% -0.1% homes and homes
for the aged only.
GROUP III MILITARY RESTAURANT SERVICES14 All others in this
grouping make no
Officers’ and NCO clubs (open mess) $1,428,713 $1,481,576 3.7% 1.0% charge for food
served either in cash
Military exchanges 658,941 679,369 3.1% 0.5% or in kind.
TOTAL — GROUP III $2,087,654 $2,160,945 3.5% 0.8% 14 Continental United
States only.
GRAND TOTAL $565,774,371 $580,060,112 2.5% -0.1%



MAJOR
MARKETS

Major markets: projected sales, 2010
This chart offers another way to look at the restaurant industry’s projected sales of $580.1 billion for 2010. While about 70 percent, or $407.4
billion, of the industry’s projected 2010 sales are in the “eating and drinking places” category, the remaining $172.7 billion of sales are driven
by other important foodservice markets. This chart provides more detail on the National Restaurant Association’s projections for sales in
these other markets in 2010, including foodservice sales at schools, worksites, health-care facilities, lodging places and the military.

Educational sales
What this category includes: Food-and-drink sales by foodservice companies that manage restaurant services in colleges, universities, primary and secondary
schools, as well as food-and-drink sales by schools that operate their own restaurant services.

2009 projected 2010 projected ‘09-’10 % ‘09-’10 % real
2010 projected food-and-drink sales $31.7 billion
F&D sales ($000) F&D sales ($000) change growth change

Colleges and universities
Managed services $12,911,951 $13,648,985 5.7% 2.9%
Noncommercial 6,169,059 6,083,266 -1.4% -4.5%
Subtotal 19,081,010 19,732,251 3.4% 0.5%
Primary and secondary schools
Managed services 5,564,018 5,862,847 5.4% 2.8%
Noncommercial 6,011,356 6,143,606 2.2% -0.4%
Subtotal 11,575,374 12,006,453 3.7% 1.1%
TOTAL EDUCATIONAL $30,656,384 $31,738,704 3.5% 0.7%

Employee sales
What this category includes: Food-and-drink sales by for-profit companies that manage restaurant services for employees at manufacturing and industrial plants
and in commercial office buildings, as well as food-and-drink sales by plants and companies that run their own noncommercial employee restaurant services.


Managed services
Manufacturing and industrial plants $6,685,577 $6,652,613 -0.5% -3.1%
Commercial and office buildings 2,520,897 2,565,265 1.8% -0.8%
Noncommercial employee restaurant services* 417,317 426,243 2.1% -0.4%
TOTAL EMPLOYEE $9,623,791 $9,644,121 0.2% -2.4%
*Includes sales for industrial plants and office buildings, seagoing ships, and inland-waterway vessels

Health-care sales
What this category includes: Food-and-drink sales by foodservice companies that manage restaurant services in hospitals and nursing homes, as well as food-
and-drink sales by hospitals and nursing homes that operate their own restaurant services.


Managed services in hospitals and nursing homes $4,735,380 $5,052,651 6.7% 4.1%
Hospitals* 14,534,908 15,225,316 4.7% 2.2%
Nursing homes** 6,963,721 7,144,778 2.6% 0.4%
TOTAL HEALTH CARE $26,234,009 $27,422,745 4.5% 2.0%
*Includes voluntary and proprietary hospitals; long-term general, TB, mental hospitals; and sales or commercial equivalent to employees in state and local short-term hospitals and federal hospitals.
**Includes homes for the aged, blind, orphans,mentally and physically disabled; sales (commercial equivalent) calculated for nursing homes and homes for the aged only. All others in this
group make no charge — either in cash or in kind for food served.



Lodging-place sales
What this category includes: Food-and-drink sales at hotel restaurants and other accommodation restaurants.


Hotel restaurants $25,368,042 $26,534,972 4.6% 1.9%
Other accommodation restaurants 394,970 407,610 3.2% 0.5%
TOTAL LODGING PLACES $25,763,012 $26,942,582 4.6% 1.9%

Military sales
What this category includes: Food-and-drink sales at military clubs and exchanges.


Officers’ and NCO clubs (Open mess) $1,428,713 $1,481,576 3.7% 1.0%
Military exchanges 658,941 679,369 3.1% 0.5%
TOTAL MILITARY* $2,087,654 $2,160,945 3.5% 0.8%
*Continental United States only.

Recreational sales
What this category includes: Food-and-drink sales at recreation and sports centers, such as movie theaters, sports arenas and bowling lanes.


Recreation and sports centers
Managed services $4,831,185 $5,025,324 4.0% 1.3%
Noncontractors 12,212,322 12,517,759 2.5% -0.2%
Subtotal 17,043,507 17,543,083 2.9% 0.2%
Clubs, sporting and recreational camps 8,479,792 8,554,233 0.9% -1.9%
TOTAL RECREATIONAL $25,523,299 $26,097,316 2.2% -0.5%
*Includes sales as movies, bowling lanes, and recreation and sports centers.
**A portion of food-and-beverage sales in clubs is business-related.

Transportation sales
What this category includes: Food-and-drink sales at military clubs and exchanges.


Managed services, in-transit commercial airlines $2,046,530 $2,061,110 0.7% -2.0%
Noncommercial transportation 1,754,173 1,829,948 4.3% 1.7%
TOTAL TRANSPORTATION $3,800,703 $3,891,058 2.4% -0.3%

Other sales

Retail hosts $29,480,534 $30,935,713 4.9% 2.3%
Mobile caterers 646,363 635,116 -1.7% -4.3%
Vending and non-store retailers 10,966,372 11,096,872 1.2% -1.4%
Community centers 2,041,828 2,139,836 4.8% 2.6%
*Includes drug- and proprietary-store, general-merchandise store, variety-store, food-store and grocery-store restaurants (including a portion of delis and all salad bars); gasoline-service-station
restaurants; and miscellaneous retailers.
**Includes sales of hot food, sandwiches, pastries, coffee and other hot beverages.


FORECAST 2010 Sales Projections 2010 Restaurant Industry Forecast

Demographics are
destiny
Disposable income, employment, other factors affect
state and regional restaurant sales estimates that restaurant-sales growth in
the nine Census regions in 2010 will range
from a high of 2.6 percent in the Middle
Atlantic states to a low of 1.8 percent for
the East North Central region. Among

G
rowth in the restaurant industry population. In 2010, as the economy states, Colorado is expected to lead the
typically varies significantly by improves, some regions that were harder nation in 2010 restaurant-sales growth.
region of the country, and is hit by the recession will see proportionally (Note: The appendix on page 34 offers
most heavily influenced by gains in stronger recovery in restaurant sales. details on restaurant-sales growth in
employment, disposable income and The National Restaurant Association each state.)

REGIONS

Regional
Snapshots
East North Central East South Central Middle Atlantic Mountain
Restaurant-sales growth1 2010 projected growth: 2010 projected growth: 2010 projected growth: 2010 projected growth:
projected for 2010 in the nine Regional National Regional National Regional National Regional National
U.S. census regions. In general,
• Jobs -1.4% -0.8% • Jobs -0.9% -0.8% • Jobs -0.6% -0.8% • Jobs -0.8% -0.8%
restaurant-sales growth is
strongest in regions where the • Income 0.5% 1.2% • Income 0.8% 1.2% • Income 1.4% 1.2% • Income 1.2% 1.2%
three key indicators — jobs, • Population 0.3% 1.0% • Population 0.9% 1.0% • Population 0.2% 1.0% • Population 1.7% 1.0%
income and population2 — out- Restaurant Restaurant Restaurant Restaurant
perform the national average. Sales 1.8% 2.3% Sales 2.1% 2.3% Sales 2.6% 2.3% Sales 2.4% 2.3%

New England Pacific South Atlantic West North Central West South Central
2010 projected growth: 2010 projected growth: 2010 projected growth: 2010 projected growth: 2010 projected growth:
Regional National Regional National Regional National Regional National Regional National
• Jobs -0.9% -0.8% • Jobs -0.9% -0.8% • Jobs -0.9% -0.8% • Jobs -0.6% -0.8% • Jobs 0.2% -0.8%
• Income 1.0% 1.2% • Income 1.2% 1.2% • Income 1.1% 1.2% • Income 1.4% 1.2% • Income 1.9% 1.2%
• Population 0.2% 1.0% • Population 1.2% 1.0% • Population 1.2% 1.0% • Population 0.5% 1.0% • Population 1.4% 1.0%

Restaurant Restaurant Restaurant Restaurant Restaurant
Sales 2.1% 2.3% Sales 2.3% 2.3% Sales 2.4% 2.3% Sales 2.0% 2.3% Sales 2.5% 2.3%

1 Regional restaurant-sales-growth figures are based on current dollars and not adjusted for menu price inflation. For definition of restaurant sales included in this grouping see page 34 footnote.
2 Economic indicators show growth in region’s total employment, real disposable personal income and total population.


2010 Restaurant Industry Forecast P&E:
FORECAST 2010 Sales Projections

STATES

Colorado to post fastest growth in restaurant sales in 2010
Restaurant sales growth in 2010 (projected)
See State Information appendix on page 34 for full sales projections for all states.

WA
2.4% NH
2.4% ME
VT
MT
ND 1.9% 2.1%
2.3% 2%
OR
2% MA
ID 2.0%
MN WI NY
2.8% SD
2.4% 2% 2.7% RI
WY 2.4%
MI 2.3%
2.1% 1.6% CT
NV IA PA 2%
2% NE 1.6% 2.4%
2.1% OH NJ
UT IL IN DE 2.7%
1.9%
CA 2.6% CO 1.9% 1.7% WV
2%
2.3% 2.9% KS 0.8% VA MD
1.4% MO KY 2.5% 2.6%
2.1% 2.0% DC
NC 2.4%
TN 2.7%
AZ OK
NM 2.3%
2.0% 2.1% AR
SC
2.3% 2.4% 2.3%
MS
1.9% AL GA
2.2% 2.5%
TX
2.7% LA
2%
AK
FL
2.5%
2.4%
Less than 2%
n 2% to 2.2%
HI
2% n 2.3% to 2.5%
n 2.6% or higher
*State restaurant-sales figures are in current dollars and not adjusted for menu price inflation. For definition of restaurant sales included in this grouping
see page 34 footnote. National sales for this group are projected to increase at a 2.3 percent rate in 2010.

2010 restaurant 2010 restaurant
Top States Top 10 States
sales growth sales volume
Projected increase in restaurant sales in 2010 Projected restaurant-sales volume in 2010
Colorado 2.9% ($000)
Idaho 2.8% 1 California $58,033,073
New Jersey 2.7% 2 Texas $34,845,154
Texas 2.7% 3 New York $29,023,207
New York 2.7% 4 Florida $27,649,697
North Carolina 2.7% 5 Illinois $18,789,263
Maryland 2.6% 6 Ohio $16,962,377
Utah 2.6% 7 Pennsylvania $16,225,096
Georgia 2.5% 8 Georgia $14,441,619
Alaska 2.5% 9 Michigan $13,449,252
Virginia 2.5% 10 New Jersey $12,856,026


FORECAST Fullservice Outlook 2010 Restaurant Industry Forecast

Sales Fullservice
1.2%

Fullservice nominal $184
$182 growth billion
billion
-1.5%

restaurants 2009*
real growth

2010*

to post slight *projected

gains in 2010
Competive pressures to intensify as
restaurants seek opportunities to build sales

HIGHLIGHTS
n Nominal sales to rise slightly in 2010. The National Restau-
rant Association projects fullservice restaurant* sales in 2010 to be
$184.2 billion, a 1.2 percent increase from 2009. That represents a
Business outlook
real sales decline of 1.5 percent after accounting for inflation. for fullservice operators in 2010
Percent of fullservice operators, by type of operation,
n 2009 recap. The Association estimates that fullservice restaurant who expect business to be better in 2010 than 2009,
or down from 2009
sales were $182 billion in 2009, a 3.9 percent decline in nominal sales
Business Business down
and a 6.2 percent drop in real sales compared to 2008. Nearly six in
better than 2009 from 2009
10 casual- and fine-dining operators and 54 percent of family-dining
operators say sales were lower in 2009 than 2008. Many operators Family dining 48% 11%
reported that customer traffic declined across all three dayparts Casual dining 50 8
(breakfast, lunch and dinner). Fine dining 61 8
Source: National Restaurant Association, operator survey, October 2009
n Competition heats up. Competitive pressures will intensify for
fullservice restaurant operators as they compete for limited consumer
dollars. Operators in all fullservice segments expect building and
maintaining sales to be their greatest challenge behind the economy. No. 1 challenge
Attracting new customers is a growing challenge: 50 percent of family-, for fullservice operators in 2010
47 percent of casual- and 38 percent of fine-dining operators expect Percent of fullservice-restaurant operators, by type of
bringing in new guests will be tougher in 2010 than it was in 2009. operation, who mention as their top challenge in 2010:
Family Casual Fine
* Fullservice restaurants provide wait staff service and take orders dining dining dining
while guests are seated, and patrons pay after they eat. The Associa-
The economy 29% 35% 30%
tion’s operator survey categorizes fullservice operators as family-,
Building/maintaining sales volume 24 23 28
casual- or fine-dining. Family-dining operations typically have lower
Government mandates 15 5 4
per-person check averages than casual-dining restaurants. If they serve
Operating costs 7 7 4
alcohol, they frequently limit service to beer and wine. Casual-dining
operations tend to register higher per-person check averages and Recruiting and retaining employees 6 3 4
usually offer full alcoholic-beverage service. Per-person check averages Source: National Restaurant Association, operator survey, October 2009
for fine-dining or “white tablecloth” operations generally exceed $25.


8
FORECAST Fullservice Outlook

2
The social media
stratosphere.

Fullservice operators are
becoming more social-media
4
savvy: Nearly four in 10 of the Interactive activities.
operators not on Facebook
plan to begin using it in the Fullservice restaurants can

3
next two years, according stand out in the crowd by
to the Association’s October focusing on their cuisine and
ways 2009 survey of fullservice creativity. By offering private
operators. About a fifth of E-mail marketing. tastings and similar events,
fullservice fullservice operators in all fullservice restaurants can tap

operators segments say they plan to use
YouTube or other video-shar-
Fine-dining operators know
the value of e-mail marketing.
into consumer interest in TV
cooking shows and celebrity
can build ing sites in the next two years. That’s why nearly seven in 10
say they use e-mail marketing
chefs. Sixty-four percent of
adults surveyed by the
sales: or newsletters. But just half of Association say they would
casual- and little more than a patronize chef’s table dinners
third of family-dining opera- and private tastings, while
tors report using such tools. 57 percent say they would
Why social media is impor- participate in interactive

1 tant: Consumers increasingly
use the Internet to engage
Why they should try it: 41
percent of consumers sur-
cooking demonstrations.
Similarly, 54 percent say they
Value-focused with restaurants and other veyed by the Association say would attend cooking classes.
options. restaurant-goers. According they choose new restaurants
to Association research, about because of e-mail promotions.
Consumers will continue to one in five adults posted or Close to 30 percent say they’d
demand restaurant value in read restaurant reviews on likely opt to receive e-mail
2010. One-third of fine-dining sites like Yelp! Twenty-six notification of daily specials
operators expect guests to be percent of these are likely to if restaurants offered it. But
more value-conscious in 2010 use Yelp! or similar consumer- their responses show restau-
than in 2009, along with 46 driven sites to find new rants need more of an online
percent of family- and 40 per- restaurants, and 59 percent of presence than just electronic
cent of casual-dining operators. these adults say a restaurant newsletters. Fifty-six percent
Restaurant frequent-dining or manager or owner’s response of consumers visit restaurant
customer-loyalty programs likely to a negative review makes Web sites, 54 percent view
will become more popular. them less likely to believe the restaurant menus and 54
Twenty-five percent of adults bad review. While only 12 percent use the Internet to
participate in those programs, percent of consumers report learn about restaurants they
which about a third of restau- visiting Facebook, YouTube or haven’t patronized. Thirty-
rants offer. More than half of other restaurant fan pages, one percent went online to
all customers say they likely and only 2 percent of respon- get nutrition information
would patronize restaurants dents follow restaurants on about restaurant foods, and
that offer customer-loyalty or Twitter, those percentages are 25 percent made restaurant
reward programs. expected to increase in 2010. reservations online.


NRA (National Restaurant Assciation Forecast 2010

NRA (National Restaurant Assciation Forecast 2010

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NRA (National Restaurant Assciation Forecast 2010