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Download Restaurant Industry 2008 and Beyond Rhode Island Hospitality & Tourism Association Economic Outlook Breakfast Providence, RI October 21, 2008 Hudson Riehle

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  • Slide 1
  • Restaurant Industry 2008 and Beyond Rhode Island Hospitality & Tourism Association Economic Outlook Breakfast Providence, RI October 21, 2008 Hudson Riehle Senior Vice President Research and Information Services National Restaurant Association
  • Slide 2
  • Agenda Overview Economic Backdrop Industry Segments Whats Hot Workforce Wrap-Up
  • Slide 3
  • DEFINITION: Restaurant Industry All meals/snacks prepared away from home, including all takeout meals and beverages
  • Slide 4
  • Restaurant Industry Commercial Restaurant Services Non-Commercial Restaurant Services Military Restaurant Services
  • Slide 5
  • Overview
  • Slide 6
  • Annual Sales: $558 billion
  • Slide 7
  • Employees: 13.1 million
  • Slide 8
  • Locations: 945,000
  • Slide 9
  • 38 Years of Restaurant-Industry Sales 1971-2008 Source: National Restaurant Association
  • Slide 10
  • 2008 Restaurant Industry Sales Gain: $24 billion
  • Slide 11
  • Source: National Restaurant Association 1955: 25%Present: 48.0% Restaurant Industrys Share of the Food Dollar
  • Slide 12
  • Fullservice Quickservice Cafeterias and buffets Caterers Snack and nonalcoholic beverage bars Managed services/ contractors at Industrial plants Hospital/nursing homes Schools and universities Airlines Recreation and sports centers Lodging places Retail hosts Book stores Service stations Convenience stores Self-operated restaurant services Military restaurant services The Industry Mosaic
  • Slide 13
  • Economic Backdrop
  • Slide 14
  • Economy Expected to Post Modest Growth into 2009 Real Growth in U.S. Gross Domestic Product Source: Bureau of Economic Analysis, National Restaurant Association Projected
  • Slide 15
  • Disposable Income Growth Projected to Slow Real Growth in Disposable Personal Income Source: Bureau of Economic Analysis, National Restaurant Association Projected
  • Slide 16
  • National Job Losses Expected to Continue in 2009 U.S. Total Employment Growth Source: Bureau of Economic Analysis, National Restaurant Association Projected
  • Slide 17
  • National Economy Posting Job Losses U.S. economy shed 760,000 jobs in the last nine months U.S. Total Job Growth Source: Bureau of Labor Statistics; figures are seasonally-adjusted
  • Slide 18
  • Industry Job Growth Falters Eating and drinking places lost jobs in two of the last three months Eating and Drinking Place Job Growth Source: Bureau of Labor Statistics; figures are seasonally-adjusted
  • Slide 19
  • Consumer Confidence Remains at a 15-Year Low U.S. Consumer Confidence Index Source: The Conference Board
  • Slide 20
  • Consumer Expectations Lowest Since 1991 Present Situation and Expectations Indices
  • Slide 21
  • Regional Consumer Confidence September 2008 77.2 88.5 50.0 39.6 63.7 45.0 61.7 Source: The Conference Board 59.8 79.9
  • Slide 22
  • Home Equity Loans Total amount outstanding at the end of each year Source: Federal Reserve Bank
  • Slide 23
  • Home Equity Cashed Out Through Refinancing Each Quarter Includes refinancing of prime, first-lien conventional mortgages Source: Freddie Mac
  • Slide 24
  • Gas Prices Fell From Record High of $4.11 Weekly average for a gallon of regular gasoline, including taxes Source: Energy Information Administration
  • Slide 25
  • Regional Average on October 13th Weekly average for regular gasoline, including taxes $3.27 $2.99 $3.19 $3.10 $3.29 $2.99 $3.42 Source: Energy Information Administration
  • Slide 26
  • Wholesale Food Prices on Pace for Strongest Gain in 29 Years 2007 was strongest gain in 27 years *Year-to-date growth through September Source: Bureau of Labor Statistics, National Restaurant Association
  • Slide 27
  • Individual Commodities Posting Stronger Gains Year-to-date Growth Through September 2008 Source: Bureau of Labor Statistics, National Restaurant Association Milled Rice63% Flour55 Fats and Oils55 Eggs34 Cheese14 Milk 9
  • Slide 28
  • Grocery Store Price Growth Outpacing Menu Prices Menu prices on pace for strongest growth since a 4.7% gain in 1990 *Year-to-date growth through September Source: Bureau of Labor Statistics, National Restaurant Association
  • Slide 29
  • Corn-based Ethanol Requirements Under RFS Billions of Gallons
  • Slide 30
  • Share of Corn Diverted to Ethanol Production % of total
  • Slide 31
  • U.S. Corn Use Projected to 2015 Billions of Bushels Source: USDA
  • Slide 32
  • Energy Prices on Pace for Strongest Gain Since 1980 Consumer Price Index (CPI) for Energy Source: Bureau of Labor Statistics, National Restaurant Association *Year-to-date growth through September
  • Slide 33
  • menu reengineering cost management productivity targeted marketing efforts expansion Typical Restaurant Operator Reactions
  • Slide 34
  • September 2008 The Economy 31% Food Costs 22 Sales Volume 15 R&R Employees 8 Gas/Energy Prices 6 Competition 1 Source: National Restaurant Association, Restaurant Industry Tracking Survey Top Challenge Facing Restaurant Operators September 2006, September 2007 and September 2008 September 2006 R&R Employees 32% Sales Volume 15 Gas/Energy Prices 13 The Economy 8 Competition 6 Food Costs 5 September 2007 R&R Employees 34% Sales Volume 16 Food Costs 11 The Economy 9 Competition 7 Gas/Energy Prices 3
  • Slide 35
  • Top Challenges Facing Restaurant Operators % of Operators Saying The Economy vs. Recruiting/Retaining Employees Source: National Restaurant Association, Restaurant Industry Tracking Survey
  • Slide 36
  • Restaurant Performance Index Fell Below 100 Values Greater than 100 = Expansion; Values Less than 100 = Contraction Source: National Restaurant Association
  • Slide 37
  • but Total Sales Remain Above 2007 Levels Seasonally-adjusted monthly sales at eating and drinking places Source: U.S. Census Bureau
  • Slide 38
  • Restaurant Industry Outperforming Retail Sector in 2008 Year-to-date growth through September 2008 Source: U.S. Census Bureau, Bureau of Labor Statistics, National Restaurant Association
  • Slide 39
  • Operators Are Uncertain about Sales Growth Restaurant operators outlook for sales volume in six months compared to the same period in the previous year Source: National Restaurant Association, Restaurant Industry Tracking Survey
  • Slide 40
  • Quickservice Operators Are Most Optimistic Restaurant operators outlook for sales volume in six months compared to the same period in the previous year Source: National Restaurant Association, Restaurant Industry Tracking Survey
  • Slide 41
  • Operators Are Pessimistic about the Economy Restaurant operators outlook for the economy in six months Source: National Restaurant Association, Restaurant Industry Tracking Survey
  • Slide 42
  • Operators Are Pessimistic about the Economy Restaurant operators outlook for the economy in six months Source: National Restaurant Association, Restaurant Industry Tracking Survey
  • Slide 43
  • Industry Segments
  • Slide 44
  • Total Restaurant Industry Sales 2008 Forecast Source: National Restaurant Association 20072008 $535 billion $558 billion
  • Slide 45
  • Fullservice Restaurant Sales 2008 Forecast 20072008 $180 billion $187 billion Source: National Restaurant Association
  • Slide 46
  • Limited-Service Restaurant Sales 2008 Forecast 20072008 $150 billion $157 billion Source: National Restaurant Association
  • Slide 47
  • Snack and Nonalcoholic Beverage Bar Sales 2008 Forecast 20072008 $19.6 billion $20.9 billion Source: National Restaurant Association
  • Slide 48
  • Managed Services Sales 2008 Forecast 20072008 $36.2 billion $38.3 billion Source: National Restaurant Association
  • Slide 49
  • Segments With Negative Real Sales Growth in 2008 Source: National Restaurant Association Cafeterias, grill buffets/buffets - 4.6% Bars and taverns- 0.6 Managed Services - Manufacturing/industrial plants- 0.3 - Manufacturing/industrial plants- 0.3 - In-transit restaurant services- 4.6 - In-transit restaurant services- 4.6
  • Slide 50
  • Segments With Negative Real Sales Growth in 2008 (contd) Source: National Restaurant Association Mobile caterers- 0.7% Non-Commercial - Employee restaurant services- 4.0 - Employee restaurant services- 4.0 - Elementary/secondary schools- 0.8 - Elementary/secondary schools- 0.8 - Colleges/universities- 3.1 - Colleges/universities- 3.1
  • Slide 51
  • Female Labor Force Participation Rate 1950 to 2007 Source: Bureau of Labor Statistics
  • Slide 52
  • Whats Hot
  • Slide 53
  • Hot Items 1Bite-size desserts 2Locally grown produce 3Organic produce 4Small plates/tapas/mezze 5Specialty sandwiches Sour

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