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Tag Archives: economic projections

And yet, not all news is positive for the restaurant industry

Restaurant operators’ optimism wanes

NRA’s Restaurant Performance Index slips in June

July 30, 2010 | By Paul Frumkin

Restaurant operators appear to be less optimistic about their future prospects, which contributed to a decline in the National Restaurant Association’s Restaurant Performance Index for the third consecutive month.

The RPI fell to 99.5 in June, a decline of 0.3 percent from May and the lowest level since February, according to the NRA. It also marks the second consecutive month the RPI has stood below 100, which reflects contraction in the monthly index of key foodservice industry indicators.

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Good and not-so-good news about restaurants in this economy


Nation’s Restaurant News has two articles in their “Breaking News” feature that points out the complexities of restaurants dealing with the economic crisis: 

O’Charley’s posts positive guest counts By Elissa  Elan 

NASHVILLE, Tenn. (Feb. 4, 2010) While consumer pressures tied to the recession pushed fourth-quarter sales into negative territory at the three chains of O’Charley’s Inc., its namesake brand and Stoney River Legendary Steaks chain posted their first year-to-year traffic increases in more than three years. 

The company also posted a narrowed net loss of $15.2 million, or 72 cents per share, for the quarter ended Dec. 27, versus a loss of $68.2 million, or $3.34 per share, in the same quarter a year ago. The improvement was mostly because of year-ago charges, when O’Charley’s booked more than $60 million in impairment for goodwill and restaurant closures. 

Latest-quarter revenue declined 6.9 percent to $188.9 million, the result of consumers cutting back on spending, O’Charley’s officials said. The company, which operates or franchises 368 restaurants under the O’Charley’s, Stoney River Legendary Steaks and Ninety Nine Restaurants casual-dining brands, had expected sales of between $190 million and $195 million. 

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Notice that this is a good news/bad news sort of thing. Cover counts are up, but people are spending less. This means that sales are still soft.

U.S. restaurant count declines

By Molly  Gise 

CHICAGO (Feb. 4, 2010) The number of U.S. restaurants fell this past fall as the industry continued to suffer from serious declines in traffic and sales. The rate of closures, however, was less than what was reported last spring. 

According to The NPD Group’s ReCount data released Wednesday, the total number of U.S. restaurants declined 0.3 percent, or by 1,652 restaurants, to 578,353 locations in the fall of 2009, compared with the fall of 2008. ReCount tracks commercial restaurant locations twice a year, in the spring and fall. 

Restaurant closures were more severe in the spring of 2009, when the total number of U.S. restaurants fell 1 percent from a year earlier, reflecting the loss of more than 4,000 eateries. 

“NPD’s fall 2009 ReCount reflects a slowdown in chains expanding, and two years of a challenging economy already weeding out the poorest performing restaurants,” said Greg Starzynski, NPD’s director of product development for foodservice. 

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So, while there are positive signs, the restaurant sector continues to face challenges, which makes it even more incumbent for waiters to execute at a high level. If you’re seeing more people but less total sales, upselling is more important than ever. As always, upselling shouldn’t be done solely to extract the maximum amount of money from the guest, but should be done to enhance the dining experience. Never lose sight of this basic tenet.

Experts cautiously optimistic about the “restaurant industry’s fortune” in 2010