September 11 has had an economic impact on the restaurant industry, yet the industry remains "remarkably resilient" and is expecting to reach a record $407.8 billion in sales next year, according to the National Restaurant Association Restaurant Industry Forecast 2002. The Forecast finds that despite the national economic downturn, the restaurant-and-foodservice industry will move into the new year with a continued stronghold on the nation's economy, with 2002 marking the 11th consecutive year of real sales growth.

"Many segments of the industry have been weathering strong challenges resulting from September 11. The good news, as we move forward, is that the restaurant-and-foodservice industry is remarkably resilient. Despite the economy being in its first recession in over 10 years, an improving economy and continued growth in disposable personal income are the catalysts that will propel the restaurant industry into another year of real growth," said Steven C. Anderson, president and chief executive officer of the National Restaurant Association.

"Restaurants will grow in their role as an important and essential component of the American lifestyle, as 2002 restaurant sales will break through the $400 billion barrier," he said.

In its 32nd year, the National Restaurant Association Restaurant Industry Forecast 2002 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.

Across the Board Growth
With the number of restaurants in the United States totaling more than 857,000, the number of restaurant jobs is also increasing. The restaurant industry is expected to employ more than 11.6 million people in 2002, and remain the nation's largest private-sector employer. According to the Forecast, sales are projected to reach $407.8 billion in 2002, a 3.9 percent increase over last year (1.4 percent when adjusted for inflation).

Fullservice Optimistic about 2002
A strong majority of fullservice restaurant operators expect business in 2002 to be better or the same as it was in 2001. Operators of higher-check establishments were the most optimistic about an improvement, with 52 percent of operators with average checks of $25 or more expecting business to be up in 2002.

This represents a solid improvement over operators' sentiment regarding business in 2001, with roughly four out of 10 operators indicating that business in 2001 was down from 2000 levels.

Among the major segments, sales at fullservice restaurants are projected to lead the way with sales growth of 4.5 percent. This segment is expected to reach $146.7 billion in 2002, a $6.4 billion increase over 2001. Even though a majority of fullservice restaurant operators said they anticipated business in 2002 to be better or the same as it was in 2001, they did indicate that the top operational challenge expected in 2002 was the economy/recession.

Quickservice Expects Continued Growth in 2002
Operators in the quickservice segment are also optimistic about business conditions in 2002. According to the National Restaurant Association 2001 Quickservice Operator Survey, 55 percent of quickservice restaurant operators indicated that business in 2002 should be better than in 2001. Nearly four out of 10 operators expect business to be the same in 2002 as it was in 2001.

Like fullservice operators, a smaller proportion of quickservice operators said business was better in 2001 than it was in 2000. Nearly half (48 percent) of quickservice operators said business was up in 2001, while 30 percent reported a downtown in business in 2001.

Sales at limited-service or quickservice restaurants - defined as those establishments without waitstaff service - are expected to increase by 3.7 percent with sales totaling $115.2 billion in 2002 (up $4.1 billion from 2001). 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 lead the nation with a projected restaurant sales growth of 6.4 percent. The Middle Atlantic region is projected to register sales growth of 3.6 percent in 2002, the slowest of the nine Census regions.

On the state level, Utah is expected to lead the nation with 13.2 percent sales growth, attributed to a boost from the 2002 Winter Olympics. Arizona and Colorado, at 6.2 percent and 6.0 percent, respectively, are expected to post the next strongest growth numbers. And Hawaii (1.3 percent) and the District of Columbia (1.8 percent) are projected to show the lowest growth in sales, associated with the expected continued weakness in tourism.

Challenges for 2002
Labor and economic issues top the list of challenges for operators this year. In recent years, quickservice and fullservice operators across all check sizes consistently identified recruiting and retaining employees as their top operational challenge. However, operators are presented with a host of additional challenges in the current economic environment.

Among quickservice restaurant operators and fullservice operators will check averages below $8, recruiting and retaining employees is the top challenge expected in 2002. However, the economic downturn was identified as the top operational challenge by fullservice operators with average checks of $8 or more. Many operators in both segments also indicated that maintaining their volume of business will be the top challenge for their operation in 2002.

For more information about regional forecasts and to view an executive summary of the Forecast, visit www.restaurant.org