2012 Restaurant Industry Forecast

www.restaurant.org/forecast

FEATURED 2012 CONSUMER RESEARCH SECTION

Decoding
Consumers
in a
Challenging
ECONOMY

n
Hunkered-dow

Op
timistic

Cautious

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Inside
The National Restaurant Association is
pleased to provide the 2012 Restaurant
Industry Forecast, our 43rd annual profile
of restaurant-industry opportunities and
challenges for the year ahead. The
research and insights are based on
analysis of the latest economic data, as
well as extensive surveys of restaurateurs
and consumers.
The National Restaurant Association will
closely monitor incoming industry and
economic data in the months ahead and
provide updates to this Forecast at
www.restaurant.org/research.
The 2012 Restaurant Industry Forecast
was prepared by the National Restaurant
Association Research and Knowledge
Group:

Hudson Riehle
Senior Vice President, Research
and Knowledge

Bruce Grindy
Chief Economist

Tim Smith
Art Director
2012 Sales Projections....................................................................................................2
Annika Stensson
Public Relations
Decoding Consumers in a Challenging Economy.........................................................9
Jennifer Batty
Editor Economic Outlook..........................................................................................................15

Fullservice Outlook.........................................................................................................21

Limited-Service Outlook................................................................................................27

Other Foodservice Segments.........................................................................................33
1200 17th St., NW, Washington, DC 20036
(800) 424-5156 | www.restaurant.org Food and Menu Trends..................................................................................................35
© 2012 National Restaurant Association
Workforce Outlook........................................................................................................41
ISBN 978-1-931400-74-9

Supply-Chain Outlook....................................................................................................47

Thank you to our National Restaurant Appendix........................................................................................................................50
Association 2012 Restaurant Industry
Forecast sponsor:

www.restaurant.org | National Restaurant Association 1

Sales Outlook 2012 Restaurant Industry Forecast

2012:
Achieving Growth
in a Challenging Environment
2012 Restaurant Industry Forecast

D
riven by the continued national choose one restaurant over another. To rants in the current environment.
economic recovery and consumers’ help operators better attract and retain The second segment looks at frequent
pent-up demand for the food, customers, the 2012 Forecast analyzes restaurant customers. These consumers are
service and social outlet that restaurants consumers by creating two segments. critical to the restaurant industry in good
provide, the U.S. restaurant industry is One segment looks at consumers by economic times, and are even more
projected to expand in 2012. According to their financial situation and spending important in the current environment. The
the National Restaurant Association’s 2012 patterns. The result is the creation of three three categories analyzed are: Frequent
Restaurant Industry Forecast, total distinct consumer categories: Optimistic Fullservice Customers, Frequent Quickser-
restaurant-industry sales are projected to Consumers, Cautious Consumers and vice Customers and Frequent Off-Premises
reach a record high of $631.8 billion in Hunkered-Down Consumers. Each group Dinner Customers. Each frequent customer
2012, a 3.5 percent increase over 2011 and has a different mindset about the econo- uses his or her respective segment more
the second consecutive year that industry my, and a different way of using restau- than once a week, on average.
sales topped the $600 billion level.
In inflation-adjusted terms, total
restaurant sales are projected to grow 0.8
percent in 2012, down slightly from a 1.3
percent gain in 2011. Although both the
Adding It All Up: $631.8 billion
nominal and real growth rates will be Projected restaurant-industry sales in 2012
somewhat below the 2011 gains, industry
growth will remain in positive territory for Commercial Restaurant Services $575.1 billion
the third consecutive year. This follows the
unprecedented two straight years of real Eating places*: $419.2 billion

sales declines in 2008 and 2009. Bars and taverns: $18.9 billion

Anticipating Consumers’ Managed services: $44.4 billion
Needs
In addition to revealing the Association’s Lodging places: $31.4 billion
sales and economic projections on the
national and state levels, the 2012 Forecast Retail, vending, recreation, mobile: $61.2 billion
also takes a detailed look at the mindset
and spending patterns of consumers. Noncommercial Restaurant Services $54.2 billion
To be successful in today’s challenging
business environment, restaurant opera- *Eating places include fullservice restaurants and limited-
tors need to understand what makes service (quickservice) restaurants, cafeterias and buffets, Military Restaurant Services $2.5 billion
social caterers, and snack and nonalcoholic beverage bars.
customers tick and what motivates them to

2 National Restaurant Association | www.restaurant.org

2012 Restaurant Industry Forecast Sales Outlook

Restaurant-Industry Restaurant-Industry Restaurant-Industry
Share of the Food Dollar Sales Employment

$ $
(Billions of Current Dollars) 14.3 million
$631.8 12.9 million
11.4 million
25% 48% $379.0
$239.3
$119.6
$42.8

1955 Present 1970 1980 1990 2000 2012* 2002 2012* 2022*
*Projected *Projected

42 Years of Restaurant-Industry Sales
This chart shows sales growth for the restaurant industry since 1971, when the National Restaurant Association began issuing its annual
forecast. The chart shows growth in the number of dollars spent each year in restaurants as well as real (inflation-adjusted) sales growth.

12.8%
12.4%
11.8% 12.3%

11.6% 11.5%
9.9%
10.8%

2012
Current dollar growth: 3.5%
9.2% 8.0% 7.9%
8.3% Real (inflation-adjusted) growth: 0.8%
8.4% 7.2%
7.7% 6.6%
6.2%
6.9% 5.8%
6.1% 5.5%
5.8% 5.3% 5.3% 5.3%
5.1% 5.0% 5.0% 4.8%
4.7% 4.6%
4.4% 4.2% 5.3%
4.2% 4.0%
3.8% 3.8% 4.0% 4.6% 4.7%
4.4% 4.5%
3.2% 4.2% 3.5%
3.0% 3.0% 3.4% 2.9% 3.0% 2.9% 3.0% 3.0%
2.8% 2.7% 3.1% 3.5%
2.5% 2.3%
2.1% 2.1% 2.0% 2.1% 2.2%
1.6% 1.6% 1.5% 1.6%
1.2% 1.2% 1.2% 1.3%
1.0% 0.8%
0.8% 0.6%
0.5%

–0.2% –0.1% –0.2%
–0.9%–0.6%

–2.8%

1971 1975 1980 1985 1990 1995 2000 2005 2010 2012

Current dollar growth Real (inflation-adjusted) growth
Growth rates are estimated for 2008 to 2010 and projected for 2011 and 2012. Providing final estimates for restaurant-industry sales from previous years is an ongoing process.
The National Restaurant Association’s Restaurant TrendMapper offers updated sales estimates as they become available.
Visit www.restaurant.org/trendmapper to learn more.
Source: National Restaurant Association



What’s in Store for Footnotes:

Restaurant-Industry Sales
1 Data are given only
for establishments
with payroll.
2 Waiter/waitress
service is provided,
Restaurant-industry food-and-drink sales: Projections for 2012 and the order is taken
while the patron is
seated. Patrons pay
‘11–’12 % after they eat.

2011 Projected 2012 Projected ‘11–’12 % Real Growth 3 Patrons generally
order at a cash
F&D Sales ($000) F&D Sales ($000) Change Change register or select items
from a food bar and
pay before they eat.
GROUP I — COMMERCIAL RESTAURANT SERVICES1
4 Formerly commercial
EATING PLACES cafeterias.
Fullservice restaurants2 $195,711,168 $201,386,792 2.9% 0.2% 5 Food-and-drink sales
for non-payroll
Limited-service (quickservice) restaurants3 168,527,095 173,751,435 3.1% 0.4% establishments are
Cafeterias, grill-buffets and buffets4 8,249,697 8,472,439 2.7% 0.0% projected to total
$12,615,226,000.
Snack and nonalcoholic beverage bars 26,580,519 27,670,321 4.1% 1.4%
6 Also referred to as
Social caterers 7,513,666 7,934,432 5.6% 2.9% onsite food-service
TOTAL EATING PLACES $406,582,145 $419,215,419 3.1% 0.4% and food contractors.

Bars and taverns 18,359,387 18,910,169 3.0% 0.4% 7 Includes drug- and
proprietary-store
TOTAL EATING-AND-DRINKING PLACES $424,941,532 $438,125,588
5
3.1% 0.4% restaurants, general-
merchandise-store
MANAGED SERVICES6 restaurants, variety-
Manufacturing and industrial plants $7,007,302 $7,340,408 4.8% 2.1% store restaurants,
food-store
Commercial and office buildings 2,611,070 2,684,180 2.8% 0.1% restaurants and
Hospitals and nursing homes 5,170,569 5,460,121 5.6% 2.7% grocery-store
restaurants
Colleges and universities 13,889,332 14,418,786 3.8% 0.6% (including a portion
Primary and secondary schools 6,041,190 6,294,920 4.2% 1.4% of delis and all salad
bars), gasoline-
In-transit restaurant services (airlines) 2,263,753 2,342,985 3.5% 0.8% service-station
restaurants and
Recreation and sports centers 5,611,996 5,875,760 4.7% 2.0% miscellaneous
TOTAL MANAGED SERVICES $42,595,212 $44,417,160 4.3% 1.4% retailers.
LODGING PLACES 8 Includes movies,
bowling lanes,
Hotel restaurants $29,602,800 $30,994,132 4.7% 2.0% recreation and sport
Other accommodation restaurants 397,166 419,805 5.7% 3.0% centers.

TOTAL LODGING PLACES $29,999,966 $31,413,937 4.7% 2.0% 9 Includes sales of hot
food, sandwiches,
Retail-host restaurants7 33,152,723 35,111,790 5.9% 3.2% pastries, coffee and
other hot beverages.
Recreation and sports8 12,922,544 13,496,710 4.4% 1.7%
10 Business,
Mobile caterers 628,422 653,685 4.0% 1.3% educational,
Vending and nonstore retailers9 11,537,834 11,883,970 3.0% 0.7% governmental or
institutional
TOTAL — GROUP I $555,778,233 $575,102,840 3.5% 0.8% organizations that
operate their own
restaurant services.
GROUP II — NONCOMMERCIAL RESTAURANT SERVICES10 11 Includes industrial
Employee restaurant services11 $424,157 $440,942 4.0% 0.9% and commercial
organizations,
Public and parochial elementary, secondary schools 6,617,656 6,844,963 3.4% 0.6% seagoing and inland-
Colleges and universities 7,206,760 7,478,958 3.8% 0.6% waterway vessels.
12 Includes voluntary and
Transportation 2,069,914 2,175,955 5.1% 2.3% proprietary hospitals;
Hospitals12 15,755,054 16,375,645 3.9% 1.2% long-term general,
TB, nervous and
Nursing homes, homes for the aged, blind, orphans, mental hospitals; and
and the mentally and physically disabled13 7,908,212 8,192,908 3.6% 0.8% sales or commercial
equivalent to
Clubs, sporting and recreational camps 9,404,611 9,711,534 3.3% 0.6% employees in state
Community centers 2,901,663 3,006,123 3.6% 0.8% and local short-term
hospitals and federal
TOTAL — GROUP II $52,288,027 $54,227,028 3.7% 0.9% hospitals.
TOTAL — GROUPS I AND II $608,066,260 $629,329,868 3.5% 0.8% 13 Sales (commercial
equivalent) calculated
for nursing homes
GROUP III — MILITARY RESTAURANT SERVICES14 and homes for the
aged only. All others
Officers’ and NCO clubs (Open mess) $1,626,203 $1,722,149 5.9% 3.2% in this grouping make
Military exchanges 719,946 764,583 6.2% 3.5% no charge for food
served either in cash
TOTAL — GROUP III $2,346,149 $2,486,732 6.0% 3.3% or in kind.
14 Continental United
States only.
GRAND TOTAL $610,412,409 $631,816,600 3.5% 0.8%



Major Markets: Projected Sales, 2012
The chart on pages 5–6 provides more detail on the National Restaurant Association’s projections for sales in markets outside the “eating-
and-drinking places” category in 2012, including foodservice sales at schools, worksites, health-care facilities, lodging places and the military.

Educational Sales
What this category includes: Food-and-drink sales by foodservice companies that manage restaurant services in colleges, universities, primary and secondary
schools, as well as food-and-drink sales by schools that operate their own restaurant services.

2011 Projected 2012 Projected ‘11–’12 % ‘11–’12 % Real
2012 projected food-and-drink sales $35.0 billion
F&D Sales ($000) F&D Sales ($000) Change Growth Change

Colleges and universities
Managed services $13,889,332 $14,418,786 3.8% 0.6%
Noncommercial 7,206,760 7,478,958 3.8% 0.6%
Subtotal 21,096,092 21,897,744 3.8% 0.6%
Primary and secondary schools
Managed services 6,041,190 6,294,920 4.2% 1.4%
Noncommercial 6,617,656 6,844,963 3.4% 0.6%
Subtotal 12,658,846 13,139,883 3.8% 1.0%
TOTAL EDUCATIONAL $33,754,938 $35,037,627 3.8% 0.8%

Employee Sales
What this category includes: Food-and-drink sales by for-profit companies that manage restaurant services for employees at manufacturing and industrial plants
and in commercial office buildings, as well as food-and-drink sales by plants and companies that run their own noncommercial employee restaurant services.


Managed services
Manufacturing and industrial plants $7,007,302 $7,340,408 4.8% 2.1%
Commercial and office buildings 2,611,070 2,684,180 2.8% 0.1%
Noncommercial employee restaurant services* 424,157 440,942 4.0% 0.9%
TOTAL EMPLOYEE $10,042,529 $10,465,530 4.2% 1.5%
*Includes sales for industrial plants and office buildings, seagoing ships, and inland-waterway vessels

Health-Care Sales
What this category includes: Food-and-drink sales by foodservice companies that manage restaurant services in hospitals and nursing homes, as well as
food-and-drink sales by hospitals and nursing homes that operate their own restaurant services.


Managed services in hospitals and nursing homes $5,170,569 $5,460,121 5.6% 2.7%
Hospitals* 15,755,054 16,375,645 3.9% 1.2%
Nursing homes** 7,908,212 8,192,908 3.6% 0.8%
TOTAL HEALTH CARE $28,833,835 $30,028,674 4.1% 1.4%
*Includes voluntary and proprietary hospitals; long-term general, TB, mental hospitals; and sales or commercial equivalent to employees in state and local short-term hospitals and federal hospitals.
**Includes homes for the aged, blind, orphans, mentally and physically disabled; sales (commercial equivalent) calculated for nursing homes and homes for the aged only. All others in this
group make no charge — either in cash or in kind for food served.

Lodging-Place Sales
What this category includes: Food-and-drink sales at hotel restaurants and other accommodation restaurants.


Hotel restaurants $29,602,800 $30,994,132 4.7% 2.0%
Other accommodation restaurants 397,166 419,805 5.7% 3.0%
TOTAL LODGING PLACES $29,999,966 $31,413,937 4.7% 2.0%



Major Markets Continued

Military Sales
What this category includes: Food-and-drink sales at military clubs and exchanges.


Officers’ and NCO clubs (Open mess) $1,626,203 $1,722,149 5.9% 3.2%
Military exchanges 719,946 764,583 6.2% 3.5%
TOTAL MILITARY* $2,346,149 $2,486,732 6.0% 3.3%
*Continental United States only.

Recreational Sales
What this category includes: Food-and-drink sales at recreation and sports centers, such as movie theaters, sports arenas and bowling lanes.


Recreation and sports centers
Managed services $5,611,996 $5,875,760 4.7% 2.0%
Noncontractors* 12,922,544 13,496,710 4.4% 1.7%
Subtotal 18,534,540 19,372,470 4.5% 1.8%
Clubs, sporting and recreational camps** 9,404,611 9,711,534 3.3% 0.6%
TOTAL RECREATIONAL $27,939,151 $29,084,004 4.1% 1.4%
*Includes sales at movies, bowling lanes, and recreation and sports centers.
**A portion of food-and-beverage sales in clubs is business-related.

Transportation Sales
What this category includes: Food-and-drink sales on airlines, passenger/cargo liners and railroads.


Managed services, in-transit commercial airlines $2,263,753 $2,342,985 3.5% 0.8%
Noncommercial transportation 2,069,914 2,175,955 5.1% 2.3%
TOTAL TRANSPORTATION $4,333,667 $4,518,940 4.3% 1.5%

Other Sales

Retail hosts* $33,152,723 $35,111,790 5.9% 3.2%
Mobile caterers 628,422 653,685 4.0% 1.3%
Vending and non-store retailers** 11,537,834 11,883,970 3.0% 0.7%
Community centers 2,901,663 3,006,123 3.6% 0.8%
*Includes drug- and proprietary-store, general-merchandise store, variety-store, food-store and grocery-store restaurants (including a portion of delis and all salad bars); gasoline/service-station
restaurants; and miscellaneous retailers.
**Includes sales of hot food, sandwiches, pastries, coffee and other hot beverages.



Restaurant-Industry Sales Over Five Years: 2008-2012
2008 2009 ‘08–’09 2010 ‘09–’10 2011 ‘10–’11 2012 ‘11–’12
Sales Sales Change Sales Change Sales Change Sales Change

COMMERCIAL RESTAURANT SERVICES $523,459,092 $519,554,791 –0.7% $535,106,004 3.0% $555,778,233 3.9% $575,102,840 3.5%
Eating Places 388,478,808 384,111,349 –1.1% 393,028,164 2.3% 406,582,145 3.4% 419,215,419 3.1%
Fullservice restaurants 191,470,223 186,109,057 –2.8% 189,459,020 1.8% 195,711,168 3.3% 201,386,792 2.9%
Limited-service restaurants 157,591,999 159,010,327 0.9% 162,985,585 2.5% 168,527,095 3.4% 173,751,435 3.1%
Cafeterias, grill-buffets and buffets 7,691,686 7,768,603 1.0% 8,017,198 3.2% 8,249,697 2.9% 8,472,439 2.7%
Snack and nonalcoholic beverage bars 24,652,412 24,504,498 –0.6% 25,484,678 4.0% 26,580,519 4.3% 27,670,321 4.1%
Social caterers 7,072,488 6,718,864 –5.0% 7,081,683 5.4% 7,513,666 6.1% 7,934,432 5.6%
Bars and taverns 17,117,259 17,305,549 1.1% 17,790,104 2.8% 18,359,387 3.2% 18,910,169 3.0%
TOTAL EATING-AND-DRINKING PLACES $405,596,067 $401,416,898 –1.0% $410,818,268 2.3% $424,941,532 3.4% $438,125,588 3.1%
NONCOMMERCIAL RESTAURANT SERVICES $47,509,488 $47,881,491 0.8% $49,823,416 4.1% $52,288,027 4.9% $54,227,028 3.7%
MILITARY RESTAURANT SERVICES $2,046,800 $2,149,353 5.0% $2,235,735 4.0% $2,346,149 4.9% $2,486,732 6.0%
TOTAL INDUSTRY SALES $573,015,380 $569,585,635 –0.6% $587,165,155 3.1% $610,412,409 4.0% $631,816,600 3.5%

Restaurant Sales by U.S. Census Region
Growth in the restaurant industry typically varies significantly by region of the country, and is most heavily influenced by gains in employment,
disposable income and population. (Note: The appendix on page 50 offers details on restaurant-sales growth in each state.)

Regional
Snapshots

East North Central East South Central Middle Atlantic Mountain
Restaurant sales1 2012 projected growth: 2012 projected growth: 2012 projected growth: 2012 projected growth:
and economic2 Regional National Regional National Regional National Regional National
growth projected • Jobs 0.6% 1.3% • Jobs 1.3% 1.3% • Jobs 1.0% 1.3% • Jobs 1.5% 1.3%
for 2012 in the • Income 0.9% 2.0% • Income 1.7% 2.0% • Income 1.6% 2.0% • Income 2.5% 2.0%
nine U.S. Census • Population 0.3% 1.0% • Population 0.8% 1.0% • Population 0.3% 1.0% • Population 1.9% 1.0%
regions Restaurant Restaurant Restaurant Restaurant
Sales 2.9% 3.2% Sales 3.0% 3.2% Sales 3.3% 3.2% Sales 3.4% 3.2%

New England Pacific South Atlantic West North Central West South Central
2012 projected growth: 2012 projected growth: 2012 projected growth: 2012 projected growth: 2012 projected growth:
Regional National Regional National Regional National Regional National Regional National
• Jobs 0.7% 1.3% • Jobs 1.1% 1.3% • Jobs 1.1% 1.3% • Jobs 1.1% 1.3% • Jobs 2.1% 1.3%
• Income 1.4% 2.0% • Income 1.7% 2.0% • Income 2.2% 2.0% • Income 2.2% 2.0% • Income 2.4% 2.0%
• Population 0.2% 1.0% • Population 1.2% 1.0% • Population 1.3% 1.0% • Population 0.7% 1.0% • Population 1.4% 1.0%

Restaurant Restaurant Restaurant Restaurant Restaurant
Sales 2.5% 3.2% Sales 3.0% 3.2% Sales 3.5% 3.2% Sales 2.8% 3.2% Sales 3.9% 3.2%

1 Regional restaurant-sales-growth figures are based on current dollars and not adjusted for menu price inflation. For definition of restaurant sales included in this grouping see page 50 footnote.
2 Economic indicators show growth in region’s total employment, real disposable personal income and total population.



Restaurant Sales Growth in 2012 (projected)
See state information appendix on page 50 for full sales projections for all states.

WA
3.3% NH
2.7% ME
VT
MT
ND 2.2% 2.7%
3.2% 4.1%
OR
3.1% MA
ID 2.4%
MN WI NY
3.2% SD
3.1% 2.8% 3.4% RI
WY 3.0%
MI 2.3%
3.7% 2.7% CT
NV IA PA 2.9%
3.4% NE 2.3% 3.2%
3.0% OH NJ
UT IL IN DE 3.3%
3.0% 3.1%
CA 3.6% CO 3.2% 2.6% WV
3.0% 3.5% KS 2.2% VA MD
2.7% MO KY 3.3% 3.7%
2.5% 3.3% DC
NC 3.3%
TN 3.3%
AZ OK
NM 2.8%
3.3% 3.4% AR
SC
3.3% 3.1% 3.6%
MS
2.8% AL GA
3.2% 3.1%
TX
4.1% LA
3.3%
AK
3.5% FL
3.9%
3.5% or higher

3.2% to 3.4%
HI
2.9% 2.8% to 3.1%

2.7% or less
*State restaurant-sales figures are in current dollars and not adjusted for menu price inflation. For definition of restaurant sales included in this grouping see page 50 footnote.
National sales for this group are projected to increase at a 3.2 percent rate in 2012.

2012 Restaurant 2012 Restaurant
Top 12 States Top 12 States
Sales Growth Sales Volume
Projected increase in restaurant sales Projected restaurant sales volume
in 2012 in 2012 ($000)
North Dakota 4.1% 1 California $63,837,084
Texas 4.1% 2 Texas $38,421,874
Florida 3.9% 3 New York $31,927,145
Wyoming 3.7% 4 Florida $31,463,913
Maryland 3.7% 5 Illinois $20,677,633
South Carolina 3.6% 6 Pennsylvania $17,084,489
Utah 3.6% 7 Ohio $16,619,422
Alaska 3.5% 8 Georgia $15,224,418
Colorado 3.5% 9 North Carolina $14,685,881
New York 3.4% 10 New Jersey $13,567,704
Oklahoma 3.4% 11 Virginia $13,263,834
Nevada 3.4% 12 Massachusetts $12,632,894


Hunkered-down
u s Optimistic
utio
Ca

FEATURED 2012 CONSUMER RESEARCH SECTION

Decoding
Consumers
in a
Challenging
Economy
W
ith the official end of the Great Recession now more than two years in the
past, most households expected things would be getting better. Sluggish job
growth, persistent high unemployment, stagnant incomes and falling home
prices were supposed to be in the rear view mirror by now. The good times should have
returned, giving consumer sentiment a much-needed boost.

Unfortunately, the reality is quite economy as either “fair” or “poor.” When
different from those expectations, accord- asked the same question in December 2010,
ing to new National Restaurant Association an identical 92 percent of adults gave the
research. In fact, from the perspective of same assessment of the economy.
many consumers, the economy didn’t It can even be argued that consumers’
improve at all in 2011. According to the view of the economy worsened over the
Association’s National Household Survey last year, as 65 percent gave the economy a
fielded in December 2011, 92 percent of “poor” rating in December 2011, an
adults described the current state of the increase from 58 percent just a year ago.

Continued …


Decoding Consumers 2012 Restaurant Industry Forecast

Although the general assessment of Consumers Still Not Confident in the Economy
the national economy remains negative, Consumers’ assessment of the economy, December 2011 versus December 2010
consumers are somewhat more positive
December 2011
about their personal financial situation.
65% 27% 7% 1%
Forty-three percent of adults described
their personal finances as “excellent” December 2010
58% 34% 8%
(10 percent) or “good” (33 percent),
while 56 percent gave a rating of “fair”
(38 percent) or “poor” (18 percent). Consumers More Optimistic About Their
This is generally on par with consumers’ Own Piggy Banks
sentiment a year ago, when four out of 10 Consumers’ assessment of their personal finances, December 2011 versus December 2010
assessed their personal financial situation
as “excellent” or “good,” and six out of 10
December 2011
18% 38% 33% 10%
said it was “fair” or “poor.”
December 2010
Outlook Remains Mixed 18% 41% 34% 7%

Consumers’ assessment of current Poor Fair Good Excellent
economic conditions is generally bleak,
Source: National Restaurant Association, National Household Survey, 2010 and 2011
but their outlook for the year ahead

56%
remains mixed. In fact, when compared
to December 2010, consumers are actually Same Old, Same Old
somewhat less optimistic about an Outlook for 2011 Outlook for 2012
improving economic environment in the (in December 2010) (in December 2011)
year ahead. Stay About
Stay About Don’t Know
Percent of adults
the Same Get Better
Three out of 10 adults (30 percent) said the Same
2% Get Better
who described their
54% 29% 44% personal finances
they think the nation’s economy will get 30%
as “fair” or “good”
better in 2012, while a solid majority
expect conditions to worsen (24 percent)
or stay the same (44 percent). This outlook
is similar to the view consumers held a year
ago, when 29 percent thought economic Get Worse 17% Get Worse 24%
conditions would improve in 2011 and Source: National Restaurant Association, National Household Survey, 2010 and 2011
17 percent thought the economy would
get worse.
On an individual level, consumers Glass Half Full or Half Empty?
are somewhat more bullish about the Consumers’ outlook for their household financial situation in 2012, by age group
prospects for their personal finances in the 70%
58% 57% 61%
year ahead. Thirty-three percent of adults 48% 49%
53%
expect their household financial situation 33% 34% 34%
to be better in 2012 than it was in 2011. 25%
13% 13% 16%
9% 11%
Meanwhile, just 9 percent said they think 2%
8%

their financial situation will get worse in
All Adults 18 to 34 35 to 44 45 to 54 55 to 64 65 or Older
2012.
Younger adults are much more optimis- Better Than 2011 About the Same as 2011 Worse Than 2011
tic about their personal economics in 2012. Source: National Restaurant Association, National Household Survey, 2011
Forty-eight percent of adults between the
ages of 18 and 34 said their household
financial situation will improve in 2012; Loss of Trust credit downgrade to Congress’s inability to
2 percent expect it to worsen. In contrast, Contributing to the general malaise in the reach a compromise on legislation, many
only 13 percent of adults age 65 and country is the overall lack of confidence in consumers have lost trust in the pillars of
older expect their household financial many of the entities and institutions that American society.
situation to get better in 2012, while a are expected to be working toward Moreover, research shows that the
higher 16 percent predicted it will get improving the common good. From the situation is getting worse. In the Associa-
worse. financial meltdown to the nation’s AAA tion’s 2010 and 2011 National Household


2012 Restaurant Industry Forecast Decoding Consumers

Confidence in Nation’s Pillars Still Challenged Consumers’ Level of
The amount of confidence consumers have in the following institutions and entities Confidence in the
Congress National Economy:
33% 36% 24% 3%
December 2010
Federal Government Very Little
None at All

24% 31% 32% 8% 15% A Great Deal
26%
5%
National News Media Quite a Bit
25% 30% 31% 6% 6%
9%
Financial Industry Some
20% 31% 37% 5% 4% 45%
Large Corporations
20% 29% 36% 9% 5% December 2011
None at All
Very Little
Businesses in Community 18%
4% 10% 42% 27% 16%
33% A Great Deal
4%
None at All Very Little Some Quite a Bit A Great Deal Quite a Bit

Source: National Restaurant Association, National Household Survey, 2011
8%

69%
Some 36%
Percent of adults who said they had little or no confidence Source: National Restaurant Association, National Household
in Congress, up from 60 percent in December 2010. Survey, 2010 and 2011

Surveys, consumers were asked how much “very little” or “none at all.” In December most, while just 10 percent picked Congress
confidence they had in various American 2010, 14 percent of adults said they had “a as the biggest economic problem solver.
institutions and entities. Without fail, their great deal” or “quite a bit” of confidence in
responses showed that confidence in most the national economy, while 41 percent said A Head’s Up on Consumer
of the main institutions and entities is they had “very little” or “none at all.” Thinking
eroding across the board. Even during good economic times, one size
In December 2011, 69 percent of adults does not fit all for consumers. Restaurant
said they had little or no confidence in Local Business operators are well aware that they have
Congress, up from 60 percent in December Leading the Way to tailor their food, service and marketing
2010. Similarly, 55 percent of adults said Consumers’ view of who is doing the most to to the kind of consumer they want to
they had little or no confidence in the help get the economy back on track reach. In today’s challenging economic
federal government or national news Don’t Know 13% Businesses environment, it is even more important for
media, up from less than half of adults in Congress in Their operators to know their customers and
Community
2010. Roughly one-half of adults said they 10% how to appeal to them.
63%
had little or no confidence in large corpora- Large The Association’s 2012 Forecast takes a
tions or the financial industry, which also Corporations detailed look at the mindset, motivations
represented an increase from a year ago. 14% and spending patterns of today’s consumers
There is one exception to consumers’ to help restaurant operators create a
Source: National Restaurant Association, National Household
declining confidence — they still have faith forward-thinking business plan that will
Survey, 2011
in their communities’ businesses. Forty- enable them to effectively compete for
three percent of adults said they have “a consumers’ limited dollars.
great deal” or “quite a bit” of confidence in Searching for Problem Solvers Based on the Association’s 2011
businesses in their community, matching the With all the challenges facing the country, National Household Survey, consumers are
proportion that reported similarly in 2010. where are consumers looking for solutions? divided into the following three segments
Taken as a whole, the result is a shortage They are turning to their local businesses. based on their financial situation, current
in confidence in the overall economy — a Nearly two-thirds of adults (63 percent) said spending behavior and economic outlook:
trend that is worsening. Only 12 percent of they think businesses in their community • Optimistic Consumers: 21 percent of
adults said they had “a great deal” or are doing the most to get the economy adults said they are confident in their
“quite a bit” of confidence in the national moving again. Fourteen percent said they financial situation and have not cut back
economy, while 51 percent said they had think large corporations are doing the on spending.



• Cautious Consumers: 42 percent of A Closer Look at Not surprisingly, Optimistic Consumers
adults said they are taking a wait-and-see Today’s Consumers have the highest average household
approach and have cut back somewhat on income out of the three groups. Sixty-three
Optimistic Cautious Hunkered-down
spending until the economy improves. Consumers Consumers Consumers percent of Optimistic Consumers have an
• Hunkered-Down Consumers: 37 annual household income of $50,000 or
21% 42% 37%
percent of adults said they are very more, and the average income for the
concerned about the economy and have Source: National Restaurant Association, National Household group is $72,600. Cautious Consumers have
Survey, 2011
cut back significantly on spending. an average household income of $63,800,
while Hunkered-Down Consumers have an
The Inside Scoop on Today’s Optimistic Consumers are age 65 or average income of $49,800.
Consumer older, higher than the other two groups. On the national level, Cautious
The demographic profiles of the three Conversely, 43 percent of Hunkered-Down Consumers are the largest category, with
consumer groups are quite diverse. Nearly Consumers are between the ages of 45 and 42 percent of adults identifying themselves
two-thirds of Optimistic Consumers (63 64, compared with 33 percent of Cautious with this group. The same holds true
percent) are men, while 57 percent of Consumers and 25 percent of Optimistic regionally—the Cautious group represents
Hunkered-Down Consumers are women. Consumers. the largest number of consumers in each
The Cautious group is almost evenly split A majority of individuals in each of the of the four U.S. regions.
between men and women. three consumer groups are employed, led by The Midwest region is home to the
Optimistic Consumers have the highest 56 percent of Cautious Consumers. Seven- highest proportion of Optimistic Consumers
representation of younger and older teen percent of Hunkered-Down Consumers (27 percent), well above this group’s share
adults. Fifty-three percent of Optimistic are currently not employed, compared with in the South (20 percent), West (20
Consumers are between the ages of 18 and 8 percent of individuals in the Optimistic and percent) and Northeast (18 percent). The
44, compared with 48 percent of Cautious Cautious groups. Optimistic Consumers are West (39 percent) and South (38 percent)
Consumers and 40 percent of Hunkered- slightly more likely to be retired than those regions have the highest proportion of
Down Consumers. Twenty-one percent of in the other two groups. Hunkered-Down Consumers.

Consumer
Consumption

Consumers who describe themselves as … OPTIMISTIC CAUTIOUS HUNKERED-DOWN

Percent of all consumers 21% 42% 37%

DEMOGRAPHIC CHARACTERISTICS

Gender Male...................... 63% Male...................... 49% Male......................43%
Female.................. 37% Female................... 51% Female...................57%

Age 18 to 44................. 53% 18 to 44................. 48% 18 to 44.................40%
45 to 64................. 25% 45 to 64 ................ 33% 45 to 64.................43%
65 and Older........ 21% 65 and Older......... 16% 65 and Older.........15%

Employment status Employed.............. 53% Employed.............. 56% Employed..............51%
Not Employed........ 8% Not Employed......... 8% Not Employed.......17%
Retired.................. 24% Retired.................. 20% Retired...................21%

Household income Less Than $50k..... 29% Less Than $50k...... 39% Less Than $50k......56%
$50k or More........ 63% $50k or More........ 53% $50k or More........37%
Avg. Income.....$72,600 Avg. Income.....$63,800 Avg. Income.... $49,800


2012 Restaurant Industry Forecast Decoding Consumers

An Economic Profile of Mapping Consumers’ Mindset
Today’s Consumer Regional breakdown of the three consumer categories Optimistic............. 18%
All three consumer groups share the same Cautious................ 45%
cloudy current assessment of the nation’s Optimistic............. 27% Hunkered-Down... 37%
economy, but Optimistic Consumers and Cautious................ 40%
Hunkered-Down... 33%
Cautious Consumers have a more optimis-
tic outlook for 2012. Forty-four percent of
Optimistic Consumers and 32 percent of
Optimistic............. 20%
Cautious Consumers expect the economy
Cautious................ 41%
to get better in 2012, while less than one Hunkered-Down... 39%
out of five think the economy will get
worse. Among Hunkered-Down Consumers,
only 20 percent expect the economy to get
Optimistic............. 20%
better in 2012, while 36 percent expect
Cautious................ 42%
economic conditions to worsen. Hunkered-Down... 38%
Optimistic Consumers also are much
more upbeat and optimistic than the other
two groups about their personal financial Source: National Restaurant Association, National Household Survey, 2011
situation. Seventy-three percent of Optimis-
tic Consumers describe their current
personal finances as “excellent” or “good,” financial situation will improve in 2012. Seventy-two percent of Optimistic Consum-
compared with 48 percent of Cautious The most striking economic difference ers said their current spending levels on
Consumers and just 20 percent of Hunkered- between the three consumer categories is things like restaurants, entertainment,
Down Consumers. All three groups are their discretionary spending levels com- clothing and travel are about the same as
generally optimistic that their personal pared with before the recession began. they were before the recession began. Only

Who’s Seeing Green:
An Economic Profile of Today’s Consumers



ECONOMIC CHARACTERISTICS

Current state of the nation’s economy Excellent/Good..... 13% Excellent/Good....... 8% Excellent/Good........4%
Fair/Poor............... 87% Fair/Poor................ 92% Fair/Poor................96%

Outlook for economy in 2012 Get Better............. 44% Get Better............. 32% Get Better.............20%
Get Worse............. 19% Get Worse............. 18% Get Worse.............36%

Current state of personal finances Excellent/Good..... 73% Excellent/Good..... 48% Excellent/Good......20%
Fair/Poor............... 26% Fair/Poor................ 52% Fair/Poor................80%

Outlook for personal financial situation in 2012 Get Better............. 41% Get Better............. 30% Get Better.............31%
Get Worse............... 1% Get Worse............... 5% Get Worse.............17%

Current spending levels on things like restaurants, Higher................... 12% Higher..................... 8% Higher...................11%
entertainment, clothing and travel compared Lower.................... 16% Lower.................... 51% Lower....................67%
with before the recession About the Same.... 72% About the Same.... 40% About the Same....20%



16 percent of Optimistic Consumers said spending, Cautious Consumers still have This is reflected in the sizable propor-
their current spending levels are lower than restaurant patronage levels above the tion of consumers who said they would
they were before the recession began. overall average. In a typical month, like to patronize the restaurant industry
In contrast, 51 percent of Cautious Cautious Consumers average 7.8 quickser- more frequently — particularly in the
Consumers and 67 percent of Hunkered- vice occasions, 5.0 fullservice occasions and Hunkered-Down group. Fifty-six percent of
Down Consumers said their current 4.6 off-premises dinner occasions. Hunkered-Down Consumers said they are
spending levels on those discretionary Although their spending levels are not eating on premises at restaurants and
items are lower than they were before the reduced in the current economic environ- fast-food places as often as they would
recession began. ment, Hunkered-Down Consumers haven’t like, while 54 percent reported similarly
completely dropped off the restaurant radar. about ordering takeout or delivery.
Consumers Still Hungry to Hunkered-Down Consumers average 4.3 This pent-up demand for restaurant
Dine Out quickservice occasions, 2.8 fullservice services also extends to the better-positioned
The good news for restaurant operators is occasions and 2.8 off-premises dinner groups, with more than one-third of Cautious
that Optimistic Consumers are above-aver- occasions in a typical month, somewhat Consumers and roughly three out of 10
age restaurant customers across the three below the national average in each category. Optimistic Consumers saying they are not
major spending categories tracked in the Regardless of the economic challenges using on-premises or off-premises options as
2012 Forecast. In a typical month, Optimis- and their impact on restaurant behavior in often as they would like. In addition, nearly
tic Consumers average 7.9 quickservice the current environment, the most positive seven out of 10 Hunkered-Down Consumers
occasions, 6.2 fullservice occasions and 5.2 news is that the vast majority of consumers (68 percent) and 53 percent of Cautious
off-premises dinner occasions. In compari- across all categories have positive feelings Consumers said they would eat out more
son, the overall adult population reported toward the restaurant industry. Ninety- often if they were financially able.
averages of 6.0 quickservice occasions, 3.9 seven percent of Optimistic Consumers, These responses indicate that once the
fullservice occasions and 3.4 off-premises 93 percent of Cautious Consumers and 89 economic environment improves, individuals in
dinner occasions in a typical month. percent of Hunkered-Down Consumers these consumer groups will eagerly resume
Despite their partial pullback on said they enjoy going to restaurants. dining on premises, ordering in and taking out.

Most Consumers Still
Enjoy Going to Restaurants



RESTAURANT BEHAVIOR

Average quickservice occasions per month 7.9 7.8 4.3

Average fullservice occasions per month 6.2 5.0 2.8

Average off-premises dinner occasions per month 5.2 4.6 2.8

Not eating on premises as often as they would like 28% 35% 56%

Not ordering takeout/delivery as often as they would like 29% 34% 54%

Would eat out more often if they were financially able 38% 53% 68%

Enjoy going to restaurants 97% 93% 89%


SECTION 1

2012
Economic
Outlook
With many consumers remaining on the sidelines and other options for
economic engines limited, the road ahead will be one of moderate
growth.

2012 Restaurant Industry Forecast

2012 Restaurant Industry Forecast

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