Restaurant Sales Projected to Reach a Record $537 Billion in '07: NRA

WASHINGTON, D.C. -- Restaurant industry sales are expected to reach a record $537 billion in 2007--a solid 5.0 percent increase over 2006 sales, according to the National Restaurant Association's 2007 Restaurant Industry Forecast, released yesterday. These new figures reveal that Americans are now spending 47.9 percent of their food budget in restaurants, the forecast noted.

But the good news for retailers: The report suggests that U.S. consumers are "starting to take back their mealtimes," with 36 percent of adults saying they are eating on the go less frequently now than they did two years ago.

The nation's 935,000 restaurant-and-foodservice outlets are expected to employ 12.8 million individuals, and add two million new career and employment opportunities in the next decade, according to the forecast.

"The restaurant industry will enter its 16th consecutive year of real growth in 2007, and will have a total economic impact that will exceed $1.3 trillion," said Steven C. Anderson, president and c.e.o. of the association, in a statement.

In addition to economic and workforce trends, the 2007 Restaurant Industry Forecast also identified consumer and menu trends, including:

-- What's Hot on Restaurant Menus? -- A survey of more than 1,000 chefs shows that some of the hottest menu trends are bite-sized desserts, locally grown and organic produce, flatbread, and bottled water. Additional hot items include pomegranates; figs; grass-fed and free-range meat; fresh herbs and exotic mushrooms; whole-grain breads and focaccia; Mediterranean, Latin American and Pan Asian fusion cuisines; salts, aged meats and ginger; pan-seared, grilled and braised items; specialty sandwiches; and Asian appetizers.

-- Organic and Local Items Increase in Popularity -- Organic items are growing in popularity across the board at tableservice restaurants. Among restaurants that currently serve organic items, 52 percent of fine dining, 42 percent of casual dining, and 27 percent of family dining restaurant operators expect higher sales of those in 2007. Locally produced food items are also growing in popularity. Fifty-one percent of fine dining, 38 percent of casual dining, and 31 percent of family dining operators expect sales of locally-sourced items to grow in 2007.

-- Diners Like to Serve Themselves -- Forty-six percent of Americans say they are likely to use customer-activated ordering and payment terminals if available in their favorite tableservice restaurant. Younger consumers are more likely to do so, as 71 percent of 18 to 24-year-olds, and 64 percent of 25 to 34-year-olds say they would. About half of all adults -- and roughly two-thirds of those aged 18 to 34 -- say they would use a self-serve order and payment terminal at a quickservice restaurant if it was available.

-- Americans Are Starting to Take Back Their Mealtimes. -- Thirty-six percent of adults say they are eating on-the-go less frequently now than they did two years ago. In addition, 48 percent say they eat in their car less frequently.

Reporting on segment trends specifically, the forecast projects that sales at full-service restaurants will reach $181.6 billion in 2007, an increase of 5.1 percent over 2006. Sales will be fueled by continued gains in consumers' disposable income (especially among baby boomers in their peak earning years), and the ability to deliver experiences that meet and exceed the demands of restaurant-savvy diners. Full-service restaurant operators will continue their focus on increasing productivity, expanding takeout options, and integrating more technology solutions both in dining rooms and kitchens.

Quick-service restaurants, meanwhile, are projected to register sales of $150.1 billion in 2007, a gain of 5.0 percent over 2006. Quick-service operators are expected to focus on diversifying their menus, promoting "better-for-you" food/beverage choices, and enhancing drive-thru, takeout, delivery, and catering options. Gift cards will also present growth opportunities in quickservice.

Across both segments, restaurants are increasing their environmental efforts. More than three out of four restaurants purchase products made from recycled materials. In addition, restaurants recycle fats/oils/grease (FOG), paper, aluminum/metal cans, glass, plastic, and food waste. Fine dining restaurants are more likely to recycle these items, with the exception of FOG, which family and casual dining operators recycle more. Two-thirds of quick-service operators recycle FOG, and two out of five recycle paper.

Economic growth is expected in all nine U.S. regions, with all regions also projecting job growth in 2007. The Mountain region will again post the strongest sales growth at 6.7 percent, followed by the South Atlantic region at 6.2 percent, and the West South Central region at 6.2 percent, due to having the fastest growth in local economies, disposable income, and population. Nevada will lead the states, posting restaurant-industry sales growth of 8.1 percent in 2007, followed by Arizona at 7.6 percent, and Florida at 7.1 percent.
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