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SOURCE: IBISWorld Inc.
In order to combat intense competition and declining demand from health-conscious consumers – both trends from the past five years – chain restaurants will expand their menus and focus on international markets overseas. For these reasons, industry research firm IBISWorld has updated a report on the Chain Restaurants industry in its growing industry report collection.
Los Angeles, CA (PRWEB) January 18, 2013
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. On average, “consumers cut spending on small luxuries like eating out, and when they did eat out, they opted for less-expensive items,” says IBISWorld analyst Nima Samadi. “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 steady growth in 2010 through 2012. “While the industry is currently benefiting from better conditions, firms will still need to contend with customers who remain hesitant to part with their money,” says Samadi. “Operators that meet these challenges will be in a stronger position for financial improvement, as economic growth approaches prerecession levels.”
The Chain Restaurants industry is made up of a number of chains and franchised operators that have establishments spread nationally and even internationally. Most major chains are investing in international expansion as part of their long-term strategies. For example, in October 2010, major company 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. Currently, industry market share concentration is low due to the vast array of chain and franchised restaurant operators and food concepts, as well as the extensive number of sites they operate. Given the industry's nature, particularly its fragmentation by food types, the level of industry concentration is not expected to change significantly in the near future. Other industry leaders include Bloomin’ Brands Inc., CBRL Group and Brinker International. 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 this type of food service 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.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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