The Economic                                                                                      Despite the positive pro...
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The Economic Factors Killing Restaurant Growth

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Consumer confidence and rising food costs have been identified as the leading causes of weak growth in the food service industry in 2011.

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The Economic Factors Killing Restaurant Growth

  1. 1. The Economic Despite the positive projections given earlier this year, two primary economic factors have Tundra Specialties, a restaurant equipment & supplies company (www.etundra.com) surveyed FACTORS KILLING continued to hamper growth in the food service industry: consumer confidence and rising food customers and found real-world experience are matching up with leading economic indicators. Restaurant Growth costs. Wholesale Food Prices 9% 7.6% 7.7% Projected 5.5% 5.6% 6% 4.9% 3.2% 3.3% 3% 1.8% 0.7% 0% -1.2% -3% -3.8% -6% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* Source: Bureau of Labor Statistics; National Restaurant Association “Our coffee house is a gathering place for the community. Total Restaurants Traffic “We are in a small town. people are hesitant to spend Therefore, the economy has positively affected our business. money. Rising costs of supplies have left us no choice Study groups, job interviews and business meetings all take but to raise our prices to meet the cost. In the same place in our shop. People also come to be uplifted and spend respect we cannot raise them enough to meet the time with friends. Our prices and food is better than our biggest costs because of the low income of our community.” .5% .5% .4% competitor, so that’s a plus too for our guests.” - dsunshine48@msn.com - Solid Grounds Coffee House -.4% -.7% Littleton, Colorado -1.8% -2.9% -2.9%What Restaurants Are Saying -3.4% What Restaurants Are SayingOf 217 Responses AMJ ‘09 JAS ‘09 OND ‘09 JFM ‘10 AMJ ‘10 JAS ‘10 OND ‘10 JFM ‘11 AMJ ‘11 Of 215 ResponsesHOW CONSUMER CONFIDENCE HOW RISING FOOD COSTSAFFECTS YOUR BUSINESS Source: The NPD Group/CREST®, quarter ending June 2011 AFFECT YOUR BUSINESS50% 50%40% 46.5% 9,450 restaurants closed 40% 42.3%30% (101) between April 1, 2010 and 30% (91) 33.5%20% March 31, 2011. 20% (72) 18.0% 16.6%10% (39) (36) 10.6% Of those 8,650 were 10% 10.7% 8.4% 8.3% (23) independently run. 5.1% (23) (18) (18) (11) Very Somewhat Not At All Somewhat Very Very Somewhat Not At All Somewhat Very Positively Positively Negatively Negatively Positively Positively Negatively Negatively ++ + - -- ++ + - --

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