 |  |  | |  | |  | |  | |  | |  | |  | |  | |  | |  |
|
|
Market
The restaurant industry is benefiting from a long-term trend toward eating out. According to the U.S. Department of Agriculture, consumption of food away from home accounted for 46.1 percent of total food expenditures in 2002, up from 44.6 percent in 1990 and 26.3 percent in 1960.
Boosting this trend is a significant decline in the cost difference between dining out and cooking at home, as well as the decline in free time. In many families, both parents hold full-time jobs, which leaves less time to prepare meals at home. With the rise of dual-income and single-parent families (more than 50 percent of families were dual-earner households in 2002, according to the Bureau of Labor Statistics), and numerous moderately priced restaurants to choose from, dining out is often the most convenient choice.
Finally, with steady growth in disposable income, Americans can more readily afford to eat out. Add to that the aging of the baby boom generation and demographic trends pointing to an older and wealthier population, and restaurant traffic should grow well into the future. The National Restaurant Association estimates that by 2010, total sales in the restaurant industry will exceed $577 billion. At that time, consumers will spend 53 percent of every food dollar on meals, snacks, and beverages prepared away from home — including food eaten in restaurants and taken out.
Applebee’s competes in the casual dining category of the restaurant industry and is the largest national chain within the category. The casual dining category includes restaurants specializing in steak, seafood, Italian or Mexican cuisine. Applebee’s is part of the “varied menu” sub-segment of this category, and derives a competitive advantage from a menu that offers a little something for everyone. Casual dining was a $70 billion business in 2003, and the average person spends about $11.34 per visit to a casual dining restaurant. |
||