Restaurant Count Declines to Drive Change in Marketing

The recession was any but kind to the restaurant industry. Estimates vary but experts believe that over 7,200 establishments closed during the past 2 years. And some analysts believe that more pain awaits the restaurant industry. This situation will lead to changes in restaurant marketing this year.

A new report from Barclays Capital predict that the U.S. restaurant industry will suffer continued contraction this year with between 0.5% and 1% of all restaurants closing.  Jeffrey Bernstein, securities analyst with Barclays says this contraction will bring restaurant supply into line with consumer demand.

The casual restaurant sector suffered the most serious losses in 2010, a total of 1.1%. Chains closed about 0.7% of the operating units and independents closed 1.2% of units.  The quick serve sector fared a little better last year. Only 0.7% of units closed. Again, independent operators with quick service fared the worst and 2.6% of those outlets closed. Quick serve chain restaurants actually grew their total units by 0.2%.

Restaurants will be competing hard for customers in 2011. Any growth they secure will likely come at the expense of a competitor because, for now, consumers are not signaling big intentions to increase spending on restaurant meals. Look for operators to continue heavy promotes to attract patrons. In addition, restaurant marketing may come from chains that are intent on increasing market share as independents close their doors at a comparatively higher rate.

[Source: Brandau, Mark. Analyst: U.S. unit count to continue declining. NRN​.com. 14 Jan. 2011. Web. 2 Feb. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.