Restaurant Industry's Resilience Continues As 2003 Marks 12th Consecutive Year Of Real Growth

12/16/2002

From: Tom Foulkes, 202-331-5902 Katharine Kim, 202-331-5939 both of the National Restaurant Association

WASHINGTON, Dec. 16 -- The restaurant industry remains strong despite the softer economy and is projected to reach a record $426.1 billion in sales next year, according to the National Restaurant Association's Restaurant Industry Forecast - 2003. The Forecast finds that in spite of fragile consumer confidence and an economy still recovering from the first recession in a decade, the restaurant-and-foodservice industry will enter into the new year with confidence, marking the 12th consecutive year of real sales growth in 2003.

"Even against our nation's economic challenges the restaurant-and-foodservice industry remains resilient and is expected to post over $426 billion in sales for 2003," said Steven C. Anderson, president and chief executive officer of the National Restaurant Association. "As restaurants continue to grow in their role as an important and essential component of the American lifestyle, the industry further demonstrates why it is the cornerstone of the nation's economy, employment opportunities and communities."

In its 33rd year, the National Restaurant Association Restaurant Industry Forecast - 2003 provides an annual projection for the restaurant-and-foodservice industry as a whole and a variety of industry segments. The Association defines the restaurant-and-foodservice industry as that which includes all meals and snacks freshly prepared away from home, including takeout meals and beverages.

"An improving economy and continued growth in disposable personal income continue to be catalysts that will drive sales up by a sizeable $18.3 billion and propel the restaurant industry into another year of real growth," said Hudson Riehle, senior vice president of the Association's Research and Information Services Division. "On a typical day in 2003, the restaurant industry will post average sales of nearly $1.2 billion."

Solid Growth

In 2002, sales growth in the restaurant industry substantially exceeded that of the entire retail sector and that trend is expected to continue next year. With the number of restaurants in the United States totaling 870,000, the number of restaurant jobs will also increase. The restaurant industry is expected to employ more than 11.7 million people in 2003, and remain the nation's largest private-sector employer. According to the Forecast, with sales projected to reach $426.1 billion in 2003, this will mark a 4.5 percent increase over last year (1.8 percent when adjusted for inflation).

Fullservice/Limited-Service Segments

Among the major segments, sales at fullservice restaurants are projected to lead the way with sales growth of 4.8 percent. This segment is expected to reach $153.2 billion in 2003, a $7.0 billion increase over 2002. A majority of fullservice restaurant operators said they anticipate business in 2003 to be better than it was in 2002; however, they did indicate that the top operational challenge expected in 2003 would continue to be the uncertain economy.

Sales at limited-service or quickservice restaurants -- defined as those chain and independent establishments without waitstaff service -- are expected to increase by 4.1 percent with sales totaling $120.9 billion in 2003 (up $4.8 billion from 2002). Operators of restaurants in this segment said their top operational challenge would continue to be recruiting and retaining employees.

Perspective from Across the Country

When it comes to how restaurants in different parts of the country will fare, the top regions in terms of sales growth are located in the South and the West - regions with the fastest growing local economies. Specifically, the Mountain region will again lead the nation with a projected restaurant sales growth of 6.6 percent. The East North Central region is projected to register sales growth of 4.0 percent in 2003, the slowest of the nine Census regions.

On the state level, Nevada is expected to lead the nation with 7.1 percent sales growth. Arizona follows closely with 7.0 percent and Colorado and Utah, both at 6.8 percent, are expected to post the next strongest growth numbers. Hawaii (3.0 percent) and the District of Columbia (3.2 percent) are projected to show the lowest growth in sales, associated with the continued weakness in tourism.

For more information about regional forecasts and to view an executive summary of the Forecast, visit www.restaurant.org. Also, visit the web site or call 1-800-482-9122, to preorder a copy of the Forecast, which will be available early next year.

--- The National Restaurant Association's Restaurant Industry Forecast - 2003 can be viewed online at:

http://www.restaurant.org/pdfs/research/2003_forecast_execsummary .pdf

------ The National Restaurant Association, founded in 1919, is the leading business association for the restaurant industry, which is comprised of 870,000 restaurant and foodservice outlets and a work force of 11.7 million employees - making it the cornerstone of the economy, career opportunities and community involvement. Along with the National Restaurant Association Educational Foundation, the Association works to represent, educate and promote the rapidly growing industry. For more information, visit our Web site at www.restaurant.org.