Restaurants Industry Overview

Excerpt from Restaurants Report

Companies in this industry operate restaurants and other eating places, including full-service restaurants (FSR), quick-service restaurants (QSR), cafeterias and buffets, and snack bars. Major companies include Bloomin’ Brands (Outback Steakhouse, Carrabba’s Italian Grill); Brinker International (Chili’s Grill & Bar, Maggiano's Little Italy); Darden Restaurants (Olive Garden, Red Lobster); McDonald's; and YUM! Brands (KFC, Pizza Hut, Taco Bell).

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 fragmented: the 50 largest companies account for about 20 percent of revenue.

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 item (pretzels, smoothies). Among FSRs, most establishments focus on Italian cuisine, steak, or seafood. Hamburger joints make up a majority of QSR locations, along with pizza parlors and sub sandwich shops. Industry revenue is roughly evenly split between FSRs and limited service.