Restaurant industry expecting gradual improvement

by Bryan Salvage
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WASHINGTON – As the economy shows signs of improving, the U.S. restaurant industry is also expected to gradually improve, according to the National Restaurant Association's 2010 Restaurant Industry Forecast. Industry sales are projected to reach $580 billion this year, a 2.5% increase in current dollars over 2009 sales.

Restaurants will continue to be stellar contributors to the recovery of the economy, as industry sales represent 4% of the U.S. gross domestic product and employees comprise 9% of the U.S. workforce.

The quick-service restaurant segment is expected to fare slightly better than the full-service segment as diners focus on value and specials. Q.S.R.s are projected to post sales of $164.8 billion in 2010, a gain of 3.0% over 2009. Sales at full-service restaurants are projected to reach $184.2 billion in 2010, an increase of 1.2% in current dollars over 2009.

Expected to show the strongest growth in 2010 within the eating-and-drinking place segment are social caterers, whose sales are expected to increase by 4.5%. Among all commercial industry segments, the strongest growth is expected in retail-host restaurants (including those located in gas/service stations and drug and grocery stores) with a 4.9% sales increase.

Colorado is expected to post the strongest sales growth in 2010 at 2.9% (2010 industry sales of $8.7 billion), followed by Idaho at 2.8% ($1.6 billion). Forecasted to post growth of 2.7% are New Jersey ($12.8 billion), New York ($29.0 billion), North Carolina ($12.8 billion) and Texas ($34.8 billion).

The top states by restaurant sales volume in 2009 will be California at $58.0 billion (2.3% growth); Texas at $34.8 billion (2.7% growth); New York at $29.0 billion (2.7% growth); Florida at $27.6 billion (2.4% growth); and Illinois at $18.7 billion (1.9% growth).

Consumers will continue to seek value, convenience and expanded menu options in 2010, according to the forecast. Consumers forced to cut back on spending say they aren't dining out as often as they would like, and this pent-up demand will turn into restaurant traffic as economic recovery continues.

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