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Restaurants Industry Profile Excerpt
| SIC Codes: 5812 NAICS Codes: 7221, 7222 Page Length: 10-12 Last Quarterly Update: 10/6/2008 View Sample Industry Profile |
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The restaurant industry includes about 500,000 restaurants with combined annual revenue of almost $400 billion. Major companies include McDonald's; YUM brands (KFC, Pizza Hut, Taco Bell); and Darden Restaurants (Olive Garden, Red Lobster). The industry is highly fragmented: the 50 largest companies hold just 20 percent of the market.
The industry consists of fullservice restaurants (FSR) and limited service eating places, which include quickservice restaurants (QSR); cafeterias; buffets; snack bars; and non-alcoholic beverage bars.
COMPETITIVE LANDSCAPE
Demographics, consumer tastes, and personal income drive demand. The profitability of individual companies can vary: while QSRs rely on efficient operations and high volume sales, FSRs rely on high-margin items and effective marketing. Large companies have advantages in purchasing, finance, and marketing. Small companies can offer superior food or service. The industry is highly labor-intensive: annual revenue per worker is between $40,000 and $45,000.
Restaurants compete with companies that serve meals or prepared foods, including grocery stores, warehouse clubs, delis, and convenience stores. In addition, restaurants compete with home cooking.
PRODUCTS, OPERATIONS & TECHNOLOGY
Products include appetizers, entrées/main dishes, desserts, and beverages. Companies may specialize in a certain type of cuisine (such as Italian, Chinese, or barbecue); entrée (sandwiches, steak, seafood); or other food items (pretzels, smoothies). Industry revenue is roughly evenly split between FSRs and limited service. In QSRs, customers generally order and pay before eating. While most QSRs are fast food restaurants, QSRs also include fast casual restaurants, which offer ...
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