Restaurant Sales Going Up After 3 Tough Years

Restaurant industry sales are expected to reach a record $604 billion and post positive growth in 2011 after a three-year period of negative real sales growth. The 2011 forecast from the National Restaurant Association (NRA) projects an industry sales increase of 3.6 percent over 2010 sales, which equals 1.1 percent in real terms.

The nation’s 960,000 restaurants are strong contributors to the economy, with industry sales representing four percent of the U.S. gross domestic product and employees comprising nearly 10 percent of the U.S. workforce. Restaurants are the nation’s second-largest private sector employer with 12.8 million employees. The NRA says the industry’s total economic impact exceeds $1.7 trillion, as every dollar spent in restaurants generates $2.05 spent in the overall economy.

“As the national economy is slowly improving, the restaurant industry is climbing out of its most challenging period in decades to post positive real sales growth in 2011,” said Hudson Riehle, senior vice president, NRA. “As in 2010, restaurant industry job growth is expected to outpace the national economy this year, emphasizing the importance of industry to the nation’s economy.”

Quick, Full Service Segments

Continuing last year’s trend, the quick service segment is expected to post slightly stronger sales growth than the full service segment. Quick service restaurants are projected to post sales of $167.7 billion this year, a gain of 3.3 percent over 2010. Sales at full service restaurants are projected to reach $194.6 billion in 2011, an increase of 3.1 percent over 2010. The eating-and-drinking place segment expected to show the strongest growth in 2011 is social caterers, whose sales are expected to increase by 6.2 percent. Other commercial foodservice segments expected to post solid growth in 2011 are hotel restaurants (+5.7 percent), hospitals and nursing homes (+5.5 percent), and primary and secondary schools (+4.8 percent).

Forecast By State and Region

Among the 50 states, North Carolina is expected to post the strongest sales growth in 2011 at 4.2 percent (industry sales are projected at $14.1 billion), followed by Idaho ($1.8 billion) and Virginia ($12.8 billion) at 4.0 percent. Forecast to post growth at 3.9 percent: Colorado ($8.6 billion), Florida ($30.1 billion), Maryland ($9.4 billion) and Texas ($36.7 billion). Regionally, the South Atlantic is expected to post the strongest sales growth at 3.9 percent, totaling $93.9 billion among its eight states (Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia) and the District of Columbia.

Workforce Outlook

Job growth is expected to accelerate in 2011. The industry will add jobs at a rate of 2.4 percent, compared to the 1.8 percent expected for the national economy. In the next decade, the industry will add 1.3 million positions. In the states, the restaurant industries in Texas and Florida will show the strongest job growth over the next 10 years at roughly 17 percent, followed by Arizona and Alabama at roughly 16 percent.

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