March 25, 2003

NRA Statement on the Impact of War on the Nation's Restaurants

Restaurants are essential to the American way of life, providing high-quality, safe, nutritious and convenient meals in a relaxing atmosphere. Historically, a wartime economy results in restaurants initially experiencing a downturn in sales—similar to other segments of the retail sector. However, because of the resilient and essential nature of the restaurant-and-foodservice industry, sales tend to rebound far more quickly and at a much faster pace than similar sectors. The overall impact of war on our industry's economic welfare varies by a restaurant's geographic location and type. For instance, international strife typically threatens domestic and international travel. As a number of restaurants rely on travel and tourism—with some establishments deriving nearly 1/3 of their sales from travelers—restaurants in larger cities and tourist destinations, as well as fine-dining restaurants, are typically more adversely affected during periods of conflict overseas. During the last sustained period of international conflict—Operation Desert Storm in the Persian Gulf in 1991— consumers initially were focused on monitoring current events on the news, having an impact on restaurant sales. As the Gulf War progressed, restaurants emerged in their role as providing consumers with a social oasis; a place to gather with family and friends. It is likely that the entrepreneurial spirit of the industry will continue to provide ways to cater to the changing needs of those customers who during this time opt for more take-away and delivery options. In gauging the impact of the war with Iraq, National Restaurant Association economists predict 2003 will result in another year of positive sales growth. In conducting the Restaurant Industry Forecast—2003, the Association factored in a slower sales growth as a direct consequence from potential overseas conflict. According to the Association, restaurant-and-foodservice sales are projected to reach $426.1 billion in 2003. The National Restaurant Association is urging consumers to continue routine daily activities, such as dining out to enhance growth in the economy. Consumers spend nearly $1.2 billion a day in the nation's restaurants. We are confident that eating out will remain an essential part of the busy American lifestyle and individuals will continue frequenting the nation's 870,000 restaurants with family and friends. Source: National Restaurant Association