Los Angeles, CA (PRWEB) September 30, 2012
The Chain Restaurants industry experienced a major slowdown during the recession due to reduced consumer spending. In the battle for consumers' shrinking budgets, restaurants increasingly lost out to home-cooked meals or fast-food restaurants. According to IBISWorld industry analyst Nima Samadi, “On average, consumers cut spending on small luxuries like eating out, and when they did eat out, they opted for less-expensive items.” Over the past five years, consumers have also become increasingly health conscious. While major restaurants have responded by expanding the number of nutritious options on their menus, the general trend toward better eating has hurt many of the less-healthy chain restaurants. As a result, IBISWorld estimates that industry revenue has fallen at an average annual rate of 0.1% to $54.6 billion over the five years to 2012.
Stronger operating conditions are in sight, though, as consumer expenditure rebounds. After revenue declined 6.8% to $50.0 billion over 2009, it picked back up with growth of 1.6% in 2010, 2.8% in 2011 and an expected 4.5% in 2012. “While the industry is currently benefiting from better demand, firms will still need to contend with customers who remain hesitant to part with their money,” says Samadi. Operators in the Chain Restaurants industry that meet these challenges will be in a stronger position for financial improvement, as economic growth approaches prerecession levels.
While there are companies in the industry that account for a significant portion of the domestic market, including Darden Restaurants and Bloomin’ Brands, the majority of the market comprises an array of chains and food concepts. Many of these chains and franchised operations have establishments spread nationally, and to a lesser extent, internationally. As such, most major chains are investing in international expansion as part of their long-term strategies. For example, in October 2010, Darden Restaurants signed an area-development agreement with one of the Middle East's largest restaurant franchising companies. This agreement marked Darden's first foray outside of North America. Many of these foreign markets have huge potential for growth and promise long-term profitability. In light of these opportunities, industry revenue is forecast to grow steadily over the five years to 2017. For more information, visit IBISWorld’s Chain Restaurants in the US industry report page.
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IBISWorld industry Report Key Topics
The industry comprises chain and franchised restaurants that provide food services to patrons who order and are served while seated (i.e. waiter or waitress service) and pay after eating. These establishments may provide these services to patrons in combination with selling alcoholic and other beverages.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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