Culinary Delight

Restaurant Sales Climb The nation's restaurants increased their sales by 6.5% in 2004 to $453.6 billion. The industry's top 100 chains posted nearly $171.3 billion in 2004 sales, up 8% over 2003. The two standout chains were McDonald's, whose 2004 sales rose 10.3%; and Starbucks with a 30.4% sales increase. Total restaurant traffic climbed 2% in 2004, the first year traffic increased since 2001.

The Industry’s Place in the Economy Currently, there are about 900,000 restaurants of all types in the United States. The nation’s restaurants average about $1.3 billion in sales each day. The restaurant industry accounts for 4% of U.S. gross domestic product each year.

Traffic Jam Fast-food hamburger restaurants, coffee shops and doughnut outlets all experienced significantly greater traffic last year. Hamburger eateries boosted their traffic by 500 million more customers in 2004. This channel now represents 23% of the U.S. restaurants' total traffic, the largest share of any type of restaurant. Coffee restaurants experienced a 200 million increase in their traffic, and doughnut shops served 150 million more than in 2003.

Dining-Out Nation Many Americans consider restaurants an essential part of their lifestyle. More than three out of five U.S. consumers eat at a restaurant at least once a week, and more than 30% do so more than once a week. Ninety-seven percent of U.S. adults eat at fast-food restaurants; 35% of U.S. adults eat fast food at least once a week. U.S. consumers eat out at full-service restaurants 5.5 times per month, or slightly more than once a week.

The Customer Base Consumers who make $75,000 a year and more and those 50 and older eat out more often than younger and less well-off consumers. Men visit restaurants more than women, 6.2 times a month vs. 4.7 times a month. Boomers and older Americans tend to like family-dining establishments. Price is the top decision driver in their choice of restaurants. Fast-food customers tend to be younger adults, between 18 and 24 years old.

What They Order Burgers, French fries, pizza and coffee have been at the top of U.S. consumers' lists for many years. The top three restaurant categories are Chinese, Mexican and Italian, which are now regarded as mainstream offerings rather than ethnic specialties. More than two-thirds of restaurant customers order their meals from the specials menu, which they perceive as a better value for the price.

New to the Menu Restaurant chains responded to health concerns by introducing items such as salads and fruits throughout 2004, with mixed success. The chains then ran successful tests of larger sandwiches, burgers, thicker-cut onion rings, chili dogs and even deep-fried ice cream. The popularity of the latter introductions proves that consumers tend to go to restaurants as an escape from their diets, not to pursue them.

Back for More The crucial elements for a restaurant in gaining repeat business are the quality and freshness of the food, and the cleanliness of the establishment. Customers are less likely to return to a restaurant where they are rushed through their meals. Speed is a more positive attribute in seating and the ordering of the meal, and when the customer is ready to leave and wants the bill.

Slower Growth for ‘05 The restaurant industry's growth will decelerate in 2005, with total sales expected to reach $475.8 billion or 4.9% greater than in 2004. Personal income growth will continue this year, but at a lesser pace than last year. Rising gasoline prices and interest rates will reduce the growth of disposable income. Housing values will also decline, all of which will dampen consumers' discretionary spending on leisure activities such as eating out.

Better Times Down the Road The increasing numbers of empty nesters will spur new growth in the restaurant industry in the years to come. These empty nesters are baby boomers, the wealthiest generation ever, and will have plenty of disposable income for eating out. Minorities, who are growing in both numbers and wealth, will also bring more growth to restaurants in the coming decades.

Advertising Strategies With so many types of dining-out options at all price ranges in every local market, the restaurant industry is one of the most fiercely competitive in the U.S. economy. Local restaurants need every marketing weapon at their disposal to compete effectively, and in advertising, no media is more effective than local television for reaching the consumers they want the most. TV’s chief advantage over other media is its combination of sight and sound, which produces advertising that carries the maximum impact on local consumers. Unlike other media, TV can create messages with images of happy customers at a restaurant, appetizing dishes and helpful and attentive waiting staff.

Advertising Strategies Many restaurants offer a variety of services beyond the dining-out experience. Along with the quality of the establishment’s food and cooking staff, television ads should highlight features such as the restaurant’s bar, catering for large functions, valet parking and takeout offerings. The advertising schedule for local restaurants needs to place a premium on frequency because consumers look for dining-out options all the time. Also, stress the necessity for plenty of exposures at the times of day in which local viewers are likely to be watching, to ensure that the ads reach the broadest spectrum of potential customers.

The answer is three simple reasons!

Your customers and potential customers use it — viewing daily for long periods of time TV’s attributes of sight, sound, motion and emotion let you best communicate your message to these people Television works in dollars returned!

Remember, Only television can give you: The right message To the right people At the right time In the right place!