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1.2 Industry Sales According to the National Restaurant Association www.restaurant.org, totalrestaurant industry sales are projected to reach $660.5 billion in 2013, an increase of3.5%,

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Richard K Miller & Associates

Restaurant, Food & Beverage Market Research Handbook 2013

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RESTAURANT, FOOD & BEVERAGE

MARKET RESEARCH HANDBOOK 2013

14th Edition

RKMA MARKET RESEARCH HANDBOOK SERIES

By: Richard K Miller and Kelli Washington

Published by:

Richard K Miller & Associates

4132 Atlanta Highway, Suite 110

Loganville, GA 30052

(888) 928-7562

www.rkma.com

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RESTAURANT, FOOD & BEVERAGE

MARKET RESEARCH HANDBOOK 2013

14th Edition

RKMA MARKET RESEARCH HANDBOOK SERIES

Copyright © 2013 by Richard K Miller & Associates

All rights reserved Printed in the United States of America.

Use of the electronic edition of this publication is limited to internal use within the purchasing organization The electronic edition may be stored on computers, Intranets, servers, and networks by organizations which have purchased this publication, and those for which an employee has made such purchase Copies, including multiple copies, may be printed from the electronic edition for use within the purchasing organization.

Libraries may store the electronic edition on an archival database or proxy server for access by library users.

Governmental agencies purchasing this publication may share the content within the agency or

department Universities and colleges may share the information within their campus, but not with other universities Membership associations may use the information within their internal organization, but may not distribute to their membership.

This publication may not be stored on Internet websites, nor may it be file-shared through the Internet This publication may not be resold or distributed without prior written agreement with the publisher While every attempt is made to provide accurate information, the author and publisher cannot be held accountable for any errors or omissions.

9781577831884

Richard K Miller & Associates

4132 Atlanta Highway, Suite 110

Loganville, GA 30052

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PART I: MARKET OVERVIEW 22

1 MARKET SUMMARY 23

1.1 Overview 23

1.2 Industry Sales 23

1.3 Revenue Distribution 25

1.4 Restaurant Sales Growth 25

1.5 Restaurant Expenditures 26

1.6 Independents and Chains 26

1.7 Chain Restaurant Classification 27

1.8 Restaurant Visits 28

1.9 Restaurant Performance Index 29

2 STATE-BY-STATE ANALYSIS 30

2.1 Restaurant Sales By State 30

2.2 Restaurant Locations By State 31

2.3 Foodservice Employment By State 32

3 REVIEW OF 2012 35

3.1 Dining Out and the Economy 35

3.2 Restaurant Business Overview 35

3.3 Restaurant Counts 36

3.4 Same-Store Sales 36

3.5 Acquisitions 38

4 PUBLICALLY TRADED RESTAURANT CORPORATIONS 40

4.1 Overview 40

4.2 Restaurant Stocks and Market Capitalization 40

PART II: TRENDS FOR 2013 42

5 CULINARY TRENDS 43

5.1 Overview 43

5.2 Culinary Themes 43

5.3 Top Menu Trends 43

5.4 Top Trends By Category 44

6 FOOD & DINING TRENDS 47

6.1 Overview 47

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6.2 Andrew Freeman & Co 47

6.3 Baum + Whiteman 49

6.4 Bon Appétit 53

6.5 Culinary Visions 55

6.6 Epicurious 58

6.7 Flavor Forecast 59

6.8 Mintel 60

6.9 Sterling-Rice Group 61

6.10 Supermarket Guru 62

6.11 Technomic 64

6.12 The Food Channel 67

6.13 Market Resources 69

PART III: CITY-BY-CITY ANALYSIS 71

7 DINING OUT 72

7.1 Metropolitan Areas 72

7.2 Market Resources 72

8 QUICK-SERVICE RESTAURANT VISITS 73

8.1 Metropolitan Areas 73

8.2 Market Resources 73

9 LARGEST CHAINS IN METROPOLITAN AREAS 74

9.1 Largest Chains and Unit Counts 74

8.2 Market Resources 88

10 RESTAURANT SALES 89

10.1 Overview 89

10.2 Restaurant Sales, Unit Counts, and Sales Per Unit 89

11 CONSUMER SPENDING AT RESTAURANTS 111

11.1 Overview 111

11.2 Per Capita Spending 111

12 MARKET GROWTH POTENTIAL 133

12.1 Overview 133

12.2 Growth Potential for MSAs 133

12.3 Market Resources 155

13 TOP MARKETS FOR QSR GROWTH 156

13.1 Top 40 Markets For Quick-Service Restaurant Expansion 156

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PART IV: MARKET SEGMENTS 158

14 CASUAL-DINING RESTAURANTS 159

14.1 Profile 159

14.2 Overview 159

15 CATERING & BANQUETS 161

15.1 Profile 161

15.2 Overview 161

15.3 Market Resources 162

16 COFFEESHOPS 163

16.1 Profile 163

16.2 Overview 163

17 CONTRACT-MANAGED FOODSERVICE 165

17.1 Profile 165

17.2 Overview 166

18 CONVENIENCE STORE FOODSERVICE 167

18.1 Profile 167

18.2 Overview 167

19 FAMILY-DINING RESTAURANTS 169

19.1 Profile 169

19.2 Overview 169

20 FAST-CASUAL RESTAURANTS 171

20.1 Profile 171

20.2 Overview 171

20.3 Comparison of Quick-Service and Fast-Casual 173

21 FINE-DINING 175

21.1 Profile 175

21.2 Overview 175

22 FOOD CONCESSIONS AT AIRPORTS 178

22.1 Profile 178

22.2 Overview 178

22.3 Market Resources 181

23 FOOD CONCESSIONS AT SPORTS VENUES 182

23.1 Market Assessment 182

23.2 Overview 182

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24 FOOD TRUCKS 184

24.1 Profile 184

24.2 Overview 184

25 MALL-BASED RESTAURANTS & FOOD COURTS 187

25.1 Profile 187

25.2 Overview 187

25.3 Market Resources 188

26 PIZZA 189

26.1 Profile 189

26.2 Trends 189

27 QUICK-SERVICE RESTAURANTS 191

27.1 Profile 191

27.2 Overview 191

27.3 The QSR Customer 193

28 SNACKS 195

28.1 Profile 195

28.2 Overview 195

28.3 Trends 196

29 SUPERMARKET FOODSERVICE 198

29.1 Profile 198

29.2 Overview 198

29.3 Trends 199

PART V: MARKET LEADERS 201

30 LARGEST BAKERY CAFE CHAINS 202

30.1 Largest Chains 202

30.2 Market Resources 202

31 LARGEST BURGER CHAINS 203

31.1 Largest Chains 203

31.2 Market Resources 205

32 LARGEST FAMILY-DINING CHAINS 206

32.1 Largest Chains 206

32.2 Market Resources 206

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33 LARGEST FAST-CASUAL RESTAURANT CHAINS 207

33.1 Largest Chains 207

33.2 Market Resources 209

34 LARGEST MEXICAN RESTAURANT CHAINS 210

34.1 Largest Chains 210

34.2 Market Resources 211

35 LARGEST PIZZA CHAINS 212

35.1 Largest Chains 212

35.2 Market Resources 214

36 LARGEST QUICK-SERVICE RESTAURANT CHAINS 215

36.1 Top Chains 215

36.2 Largest QSR Chains By Category 216

37 LARGEST SANDWICH CHAINS 219

37.1 Largest Chains 219

37.2 Market Resources 221

38 TOP 200 CHAINS 222

38.1 Overview 222

38.2 Largest Chains 222

39 TOP CHAINS BY SEGMENT 227

39.1 Overview 227

38.2 Segment Assessment 227

40 TOP FOODSERVICE DISTRIBUTORS 232

40.1 Ranking By Annual Sales 232

40.2 Market Resources 232

41 TOP FRANCHISED BRANDS 233

41.1 Number of Franchised Units 233

41.2 Market Resources 233

42 TOP RESTAURANT FRANCHISEES 234

42.1 Market Leaders 234

42.2 Top 100 Restaurant Franchise Companies 234

42.3 Market Resources 236

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43 TOP GROWTH CHAINS 237

43.1 Systemwide Sales Growth 237

43.2 Market Resources 241

44 TOP INDEPENDENT RESTAURANTS 242

44.1 Rank By Annual Gross Revenue 242

45 TOP MULTI-CHAIN OPERATORS 243

45.1 Largest Multi-Brand Restaurant Companies 243

46 TOP MULTI-CONCEPT OPERATORS 245

46.1 Largest Companies 245

46.2 Largest Multi-Concept Operators 245

46.3 Profiles 245

47 TOP NIGHTCLUBS & BARS 254

47.1 Top Clubs 254

PART VI: THE CUSTOMER 257

48 CUSTOMER DEMOGRAPHICS 258

48.1 Overview 258

48.2 Breakfast at Full-Service Restaurants 258

48.3 Breakfast at Quick-Service Restaurants 260

48.4 Lunch at Full-Service Restaurants 262

48.5 Lunch at Quick-Service Restaurants 263

48.6 Dinner at Full-Service Restaurants 265

48.7 Dinner at Quick-Service Restaurants 267

48.8 Dining While Traveling 268

48.9 Snacks at Quick-Service Restaurants 270

48.10 Spending by Age 272

48.11 Spending by Household Income 272

48.12 Spending by Household Type 272

48.13 Spending by Race and Ethnicity 272

48.14 Spending by Region 272

48.15 Spending by Education 273

48.16 Market Resources 273

49 CUSTOMER PROFILE 274

49.1 Restaurant Visits By Age 274

49.2 The Full-Service Dining Customer 275

49.3 The Quick-Service Dining Customer 275

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49.5 Families Dining Out 277

49.6 Value-Focused Customers 277

49.7 What Customers Want 278

50 CUSTOMER SATISFACTION 280

50.1 Overview 280

50.2 Factors Contributing To High Customer Satisfaction 280

50.3 Market Resources 291

51 HISPANIC-AMERICAN CUSTOMERS 292

51.1 Overview 292

51.2 Market Assessment 292

51.3 Hispanic Restaurant Patronage 293

51.4 Hispanic Menu Preferences 294

52 MILLENNIAL CUSTOMERS 296

52.1 Overview 296

52.2 Restaurant Visits By Millennials 296

52.3 Dining Priorities 297

52.4 Restaurant Interactions Online and Mobile 298

53 RESTAURANT & MENU PREFERENCES 300

53.1 Why Consumers Dine Out 300

53.2 Factors In Choosing A Restaurant 301

53.3 Factors In Choosing A Menu Item 302

54 SOCIAL NETWORKING 304

54.1 Overview 304

54.2 Restaurant Social Media Index 304

54.3 Facebook 307

54.4 Twitter 309

54.5 Market Resources 310

PART VII: DINING TRENDS & ANALYSES 311

55 BURGERS & SANDWICHES 312

55.1 Overview 312

55.2 Hamburgers 312

55.3 Hot Dogs & Sausages 313

55.4 Other Sandwiches 314

55.5 Market Resources 315

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56 CELEBRITY CHEFS 316

56.1 Cooking Shows On Television 316

56.2 Top-Earning Chefs 316

56.3 Chef Business Ventures 317

56.4 Chef-Inspired Restaurant Concepts 319

57 CHILDREN’S MEALS 321

57.1 The Kids LiveWell Initiative 321

57.2 Healthful Kids’ Menus At QSRs 321

57.3 School Meals 322

57.4 Market Resources 323

58 CUISINE 324

58.1 Regional Cuisine 324

58.2 Ethnic Cuisine 327

59 CUSTOMER SERVICE 328

59.1 Ranking Customer Priorities 328

59.2 Customer Service Strategies 328

59.3 Team Service 329

59.4 Top Restaurants For Service 330

60 DAYPARTS 331

60.1 Daypart Spending and Traffic 331

60.2 Breakfast 332

60.3 Lunch 333

60.4 Dinner 334

61 DINING & THE INTERNET 336

61.1 Consumer Use Of The Internet For Dining Activities 336

61.2 Restaurant Websites 338

61.3 Online Reservations 339

61.4 Online Reviews 339

61.5 Social Networking 339

61.6 Online Ordering 340

61.7 In-Restaurant Ordering Via Tablet 341

62 DINING WHILE TRAVELING 342

62.1 Traveler Dining 342

62.2 Culinary Destinations 342

62.3 Sampling Tours 343

62.4 Culinary Arts Programs 343

62.5 Winery Tours 344

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63 DINING WITH ENTERTAINMENT 347

63.1 Overview 347

63.2 Live Music and Dining 348

63.3 Theme Restaurants 348

63.4 Experiential Restaurants 349

63.5 Mystery Dinner Theaters 350

63.6 Dinner and a Movie 350

63.7 Speakeasies 351

63.8 Novel Restaurants 352

64 DOG-FRIENDLY RESTAURANTS 354

64.1 Overview 354

64.2 Dog-friendly Restaurants 354

64.3 Dog Menus 355

65 FOOD & WINE FESTIVALS 356

65.1 Overview 356

65.2 Prominent Food Festivals 356

65.3 Market Resources 357

66 HOLIDAY DINING 358

66.1 Overview 358

66.2 Birthdays 358

66.3 Valentine’s Day 359

66.4 Mother’s Day 359

66.5 Father’s Day 360

66.6 Easter 360

66.7 New Year’s Eve 360

66.8 Thanksgiving 360

66.9 St Patrick’s Day 361

66.10 Oktoberfest 361

66.11 Super Bowl Sunday 361

67 LATE-NIGHT HOURS 363

67.1 Overview 363

67.2 Late-Night Customer Demographics 363

67.3 Late-Night Operations 364

68 LICENSING 366

68.1 Market Assessment 366

68.2 Case Studies 366

68.3 Market Trends 368

68.4 Market Resources 369

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69 LOCALLY SOURCED & ORGANIC FOOD 370

69.1 Local & Organic Preferences Among Consumers 370

69.2 Locavores 371

69.3 Local Sourcing At Limited-Service Restaurants 372

69.4 Chef- and Restaurant-owned Farms 373

69.5 Organic Menus 374

70 LOYALTY PROGRAMS 375

70.1 Overview 375

70.2 Restaurant Programs 375

70.3 Customer Participation 375

70.4 Social Networking With Loyalty Customers 375

71 NON-TRADITIONAL RESTAURANT SITES 377

71.1 Pop-Up Restaurants 377

71.2 Restaurants At Auto Dealerships 378

71.3 Restaurants At Car Washes 378

71.4 Restaurants At Museums and Tourist Attractions 378

71.5 Restaurants At Parks and Botanical Gardens 379

71.6 Restaurants At Retail Stores 379

72 NUTRITION 382

72.1 Healthful Dining 382

72.2 Portion Control 383

72.3 Menu Labeling 383

72.4 Trans Fat 384

72.5 Reduced Sodium 384

73 RESTRICTIVE DIET MENUS 386

73.1 Overview 386

73.2 Gluten-Free Menu Items 386

73.3 Kosher Cuisine 387

73.4 Halal Foods 388

73.5 Vegetarian Cuisine 388

74 SEAFOOD 390

74.1 Seafood Entrees in Restaurants 390

74.2 Trends 390

74.3 Sustainable Seafood 390

74.4 Labeling 392

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75 SNACKING 394

75.1 Overview 394

75.2 Market Assessment 395

75.3 Snack Food Trends 396

76 TAKEOUT & DELIVERY 397

76.1 Market Assessment 397

76.2 Takeout and The American Lifestyle 397

76.3 The Takeout and Delivery Customer 397

76.4 Pizza Delivery 398

76.5 Quick-Service Carryout and Delivery 398

76.6 Takeout At Full-Service Chains 399

76.7 Takeout for Offices and Elsewhere 399

76.8 Takeout Packaging 399

77 VALUE-FOCUSED DINING 401

77.1 Overview 401

77.2 Trading Down 401

77.3 Promotions 403

77.4 Off-Peak Specials 403

PART VIII: BEVERAGE TRENDS & ANALYSES 405

78 BEVERAGE CONSUMPTION & SPENDING 406

78.1 Beverage Consumption 406

78.2 Beverage Spending 406

78.3 Alcoholic Beverages 407

78.4 Nonalcoholic Beverages 411

79 BEER 412

79.1 Market Assessment 412

79.2 Market Leaders 413

79.3 Top Domestic Beer Brands 414

79.4 Demographics 414

79.5 Craft Beer 415

79.6 Imported Beer 416

79.7 Flavored Malt Beverages 416

79.8 On-Premise 417

80 DISTILLED SPIRITS 418

80.1 Market Assessment 418

80.2 Major Brands 420

80.3 Whiskey 421

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80.4 Vodka 423

80.5 Rum 425

80.6 Tequila 427

80.7 Gin 428

80.8 Brandy and Cognac 429

80.9 Cordials 430

81 WINE 432

81.1 Market Assessment 432

81.2 U.S Wine Exports 433

81.3 Market Leaders 433

81.4 Wine Consumer Characteristics 433

81.5 Champagne and Sparkling Wine 434

81.6 Oneophiles 435

82 REFRESHMENT & FUNCTIONAL BEVERAGES 436

82.1 Carbonated Soft Drinks 436

82.2 Consumption Demographics 438

82.3 Sports Beverages 438

82.4 Energy Drinks 439

82.5 Juice & Fruit Drinks 441

83 COFFEE & TEA 444

83.1 Coffee Consumption 444

83.2 RTD Coffee 445

83.3 Coffeeshops 445

83.4 Tea Consumption 445

83.5 RTD Tea 446

83.6 Tea Stores and Tea Bars 447

84 BOTTLED WATER 448

84.1 Consumption and Spending 448

84.2 Consumption Demographics 449

84.3 Market Leaders 449

84.4 Market Drivers 450

85 MILK 451

85.1 Consumption and Dairy Production 451

85.2 Consumer Spending 451

85.3 Market Drivers 451

86 BEVERAGE SERVICE IN RESTAURANTS & BARS 453

86.1 Market Assessment 453

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86.3 Alcoholic Beverage Service in Full-Service Restaurants 454

86.4 Alcoholic Beverage Service In Limited-Service Restaurants 457

86.5 Nonalcoholic Cocktails 458

86.6 Happy Hours 460

86.7 Beverage-Only Restaurant Occasions 461

PART IX: AWARD WINNERS 462

87 BEST NEW CHEFS 463

87.1 Overview 463

87.2 Award Winners 2012 463

87.3 Recent Award Winners 463

88 BEST NEW RESTAURANTS 466

88.1 Lists For 2012 466

89 BENCHMARK AWARDS 469

89.1 Overview 469

89.2 Award Winners 2012 469

89.3 Recent Award Winners 469

90 BEVERAGE EXCELLENCE AWARDS 471

90.1 Overview 471

90.2 Award Winners 2013 471

90.3 Award Winners 2012 472

90.4 Award Winners 2011 473

91 CHAIN RESTAURANT CONSUMERS’ CHOICE AWARDS 474

91.1 Overview 474

91.2 Award Winners 2013 474

91.3 Market Resources 474

92 CONSUMER PICKS 475

92.1 Overview 475

92.2 Favorites By Segment 475

92.3 Favorites By Demographic 476

92.4 Market Resources 477

93 CUSTOMER SATISFACTION 478

93.1 Overview 478

93.2 ACSI Scores 478

93.3 Customer Satisfaction Scores 478

93.4 Market Resources 479

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94 DINERS’ CHOICE AWARDS 480

94.1 Overview 480

94.2 Best Restaurant 480

94.3 Best Service 483

94.4 Brunch 485

94.5 Fit For Foodies Restaurants 487

94.6 Hot Spots 490

94.7 Kid-Friendly Restaurants 492

94.8 Late-Night Dining 493

94.9 Most Notable Wine Lists 496

94.10 Most Romantic Restaurants 498

94.11 Most Scenic Views 500

94.12 Outdoor Dining 503

94.13 Top American Cuisine 505

95 DISTINGUISHED RESTAURANTS 508

95.1 Overview 508

95.2 List Of Distinguished Restaurants 2013 508

96 FAVORITE LIMITED-SERVICE RESTAURANTS 521

96.1 Overview 521

96.2 Top Chains By Segment 521

96.3 Market Resources 522

97 FINE-DINING HALL OF FAME 523

97.1 List of Inductees 523

98 FIVE- AND FOUR-DIAMOND AWARDS 526

98.1 Five-Diamnd Award Winners 526

98.2 Four-Diamnd Award Winners 528

99 FUTURE 50 544

99.1 Overview 544

99.2 Fastest Growing Chains 2012 544

99.3 Market Resources 545

100 GREAT STEAK HOUSES 546

100.1 Overview 546

100.2 List Of Recognitions 2013 546

101 HOT CONCEPTS! 547

101.1 Award Recipients 2012 547

101.2 Recent Designations 547

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102 JAMES BEARD FOUNDATION AWARDS 550

102.1 Overview 550

102.2 Award Winners 2012 550

102.3 Recent Award Winners 551

102.4 Market Resources 552

103 MENU MASTERS 553

103.1 Overview 553

103.2 Winners By Category 553

103.3 Market Resources 556

104 MICHELIN 3-STAR RESTAURANTS 557

104.1 Overview 557

104.2 Chicago 3-Star Restaurants 557

104.3 New York 3-Star Restaurants 557

104.4 San Francisco 3-Star Restaurants 557

105 MILLENNIALS’ FAVORITE RESTAURANT CHAINS 558

105.1 Overview 558

105.2 Favorite Restaurant Chains 559

105.3 Market Resources 559

106 RESTAURANT NEIGHBOR AWARD 560

106.1 Award Winners 2012 560

107 SELECTIONS: BON APPÉTIT 561

107.1 Overview 561

107.2 Best Restaurant and Snack Shops Sepections 561

108 SELECTIONS: DINERS, DRIVE-INS & DIVES 565

108.1 Overview 565

108.2 List Of Featured Restaurants 565

109 SELECTIONS: FOOD & WINE 579

109.1 Overview 579

109.2 America’s Best 579

110 SELECTIONS: GAYOT 589

110.1 Overview 589

110.2 Top 40 List 2012 589

110.3 Top 10 By Segment 590

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111 SELECTIONS: THE DAILY MEAL 596

111.1 Overview 596

111.2 Top Selections 2012 596

111.3 Market Resources 602

112 SELECTIONS: TRAVEL + LEISURE 603

112.1 Overview 603

112.2 Restaurant and Beverage Service Selections 603

113 SELECTIONS: ZAGAT 611

113.1 Best Burgers 611

113.2 Best Business Lunch 613

113.3 Best Sandwiches 614

113.4 Best Service 615

113.5 Business Trip Dining 617

113.6 Hotel Restaurants 625

113.7 Market Resources 627

114 STAR DIAMOND AWARD 628

114.1 Overview 628

114.2 Five Star Diamond Awards 2013 628

115 THE NRN 50 630

115.1 Overview 630

115.2 Breakout Brands 2013 630

115.3 Market Resources 632

116 TOP BEER BARS 633

116.1 Award Winners 2013 633

117 TOP RESTAURANT BRANDS 637

117.1 Overview 637

117.2 Top Brand Scores 2011 637

117.3 Market Resources 637

118 WINE SPECTATOR GRAND AWARD 638

118.1 Overview 638

118.2 Award Recipients 2012 638

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PART X: FOOD & BEVERAGE DESIGNATIONS 641

119 NATIONAL FOOD & BEVERAGE HOLIDAYS 642

119.1 Overview 642

119.2 National Food & Beverage Days 642

119.3 National Food & Beverage Weeks 653

119.4 National Food & Beverage Months 654

120 STATE FOODS 658

120.1 Overview 658

120.2 List of Official State Foods 658

APPENDIX A - ACADEMIC PROGRAMS 662

APPENDIX B - ANALYSTS & MARKET CONSULTANTS 668

APPENDIX C - ASSOCIATIONS 671

APPENDIX D - PERIODICALS 673

APPENDIX E - STATE RESTAURANT ASSOCIATIONS 675

REFERENCES 680

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PART I: MARKET OVERVIEW

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1 MARKET SUMMARY

1.1 Overview

There are more than 980,000 restaurant and f oodservice locations in the UnitedStates The restaurant share of the food dollar is approximately 48% The industryemploys 13.1 million people

1.2 Industry Sales

According to the National Restaurant Association (www.restaurant.org), totalrestaurant industry sales are projected to reach $660.5 billion in 2013, an increase of3.5%, or 0.8% on an inflation-adjusted basis Sales reached $636.4 billion in 2012 Distribution for 2013 is as follows:

COMMERCIAL RESTAURANT SERVICES

The National Restaurant Association projects food and beverage sales forrestaurant and foodservice segments in 2013 as follows (change from 2012 in

parenthesis):

EATING AND DRINKING PLACES

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• Snack and nonalcoholic beverage bars: $ 29.06 billion (4.3%)

RETAIL AND LODGING

hot food, sandwiches, pastries, coffee,

FOODSERVICE CONTRACTOR-MANAGED SERVICES

NONCOMMERCIAL RESTAURANT SERVICES

(Businesses, educational, governmental, or institutional organizations which operate their own restaurant services)

• Hospitals (includes voluntary, proprietary hospitals,

long-term general, TB, nervous and mental

hospitals, state and local short-term hospitals,

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MILITARY RESTAURANT SERVICES

1.3 Revenue Distribution

According to the National Restaurant Association, revenue distribution for

restaurant segments is as follows:

1.4 Restaurant Sales Growth

According to the National Restaurant Association, sales growth for the restaurantindustry is as follows:

Current Dollar Real (Inflation-Adjusted) Growth Growth

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1.5 Restaurant Expenditures

According to the National Restaurant Association, expenses for full-servicerestaurants are distributed as follows:

marketing, utility services, maintenance,

depreciation, administrative, interest,

Expenses for limited-service restaurants are distributed as follows:

1.6 Independents and Chains

According to the ReCount® restaurant census database by The NPD Group(www.npd.com), there were 616,008 restaurants in the United States in f all 2012, a0.7% change from fall 2011 Restaurants counts are as follows (change from a yearprior in parenthesis):

There are 362 restaurant chains in the U.S with annual revenue of $50 million ormore Distribution by menu type is as follows:

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• Casual-dining: 196

A survey by Mintel (www.mintel.com) found that 52% of consumers visit

independent restaurants to support their local econom y Among those who had notvisited an independent restaurant within the past month, 22% had not done so becausethey deemed them to be more expensive than chain restaurants

1.7 Chain Restaurant Classification

According to 2012 Chain Restaurant Operators, published by Chain Store Guide

(www.chainstoreguide.com), there are 368,153 chain restaurants in the United States Distribution is as follows:

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* Some locations offer more than one type of foodservice or menu

Chain Store Guide includes all restaurant groups with two or more locations inthe count of chain restaurants The NPD Group classifies some small local restaurantgroups as independents This difference, in part, accounts for the differing counts insections 1.7 and 1.8

Restaurant visits by age demographic are assessed in Section 49.1 of this handbook

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1.9 Restaurant Performance Index

The National Restaurant Association publishes a m onthly Restaurant

Performance Index (RPI), a composite index that tracks the health of and outlook forthe U.S restaurant industry The RPI is released and made available at

www.restaurant.org on the last business day of each month

The RPI is constructed so that the health of the restaurant industry is measured

in relation to a steady-state level of 100 Index values above 100 indicate that keyindustry indicators are in a period of expansion, while index values below 100 represent

a period of contraction for key industry indicators

The RPI consists of two components: the Current Situation Index and the

Expectations Index The Current Situation Index measures current trends in four

industry indicators (same-store sales, traffic, labor, and capital expenditures) TheExpectations Index measures restaurant operators’ six-month outlook for four industryindicators (same-store sales, employees, capital expenditures, and business

conditions)

The following graph shows the RPI since 2003

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2 STATE-BY-STATE ANALYSIS

2.1 Restaurant Sales By State

According to the National Restaurant Association (www.restaurant.org),

restaurant sales in 2013 for each state are projected as follows (change from 2012 inparenthesis):

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2.2 Restaurant Locations By State

According to the National Restaurant Association, at year-end 2011 (most recentdata available) the number of restaurants by state was as follows:

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2.3 Foodservice Employment By State

According to 2013 Restaurant Industry Forecast by the National Restaurant

Association, 13.11 million people are employed in the restaurant and foodservicesector, a figure which is projected to increase at an average national rate of 0.9%through 2023

Current restaurant employment and the projected average annual increasethrough 2023 are as follows:

Employment Increase

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3 REVIEW OF 2012

3.1 Dining Out and the Economy

Harris Interactive (www.harrisinteractive.com), which monitors consumer

spending through nationwide polls, found that during the economic downturn moreconsumers decreased spending on dining out than for any other major budget item

Fewer consumers in 2012 had said they planned to decrease spending on diningout than any time since 2008 Consumer cutbacks in restaurant spending peaked in

2009 When polls by Harris Interactive asked consumers if they planned to decreaserestaurant spending during the coming six months, responses were as follows

(percentage saying very/somewhat likely):

3.2 Restaurant Business Overview

When asked by the National Restaurant Association (www.restaurant.org) in aNovember 2012 survey to describe overall business conditions in their segment,

restaurant operators responded as follows:

Excellent Good Fair Poor

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When asked to compare their anticipated profitability in 2013 with 2012,

responses were as follows:

Better Same Worse

“There were 4,442 more restaurants in the U.S.

in fall 2012 than there were in fall 2011.”

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• BJ’s Restaurant & Brewhouse: 6.5%

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Family-Dining and Buffet

Coffee and Snack

* as of February 2013

3.5 Acquisitions

The following were major restaurant chain acquisitions in 2012:

Buyer Deal Value

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• Talbott Teas: Jamba Inc Undisclosed

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4 PUBLICALLY TRADED RESTAURANT CORPORATIONS

4.1 Overview

Stocks for 19 restaurant corporations are traded on the New York Stock

Exchange and 30 are traded on Nasdaq The combined market capitalization for these

49 companies is $237.64 billion (as of February 2013)

4.2 Restaurant Stocks and Market Capitalization

Publically traded restaurant corporations and their market capitalization are asfollows:

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