Cafes Can Be Cash Cows For Contractors

January 23, 2003
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Refrigeration and A/C contractors seeking a growth sector in which to offer services may want to look at the wide range of restaurants they pass by most every day.

The restaurant industry remains strong despite the soft economy, and is projected to reach a record $426.1 billion in sales in 2003, according to a statement released in mid-December by the National Restaurant Association. This is a 4.5 percent increase over 2002 (1.8 percent when adjusted for inflation).

That means an increasing number of customers will be taxing the refrigeration and air conditioning equipment, which in turn will be in need of repair or replacement.

It even appears that the owners may have the money to pay for such services.

“Even with our nation’s economic challenges, the restaurant and foodservice industry remains resilient,” said Steven C. Anderson, president and CEO of the National Restaurant Association.

“As restaurants continue to grow in their role as an important and essential component of the American lifestyle, the industry further demonstrates why it is the cornerstone of the nation’s economy, employment opportunities, and communities.”

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.

Sales Are Driven

“An improving economy and continued growth in disposable personal income continue to be catalysts that will drive sales up by a sizeable $18.3 billion and propel the restaurant industry into another year of real growth,” said Hudson Riehle, senior vice president of the association’s Research and Information Services Division.

“On a typical day in 2003, the restaurant industry will post average sales of nearly $1.2 billion.”

Among the major segments, sales at full-service restaurants are projected to lead the way with growth of 4.8 percent. This segment is expected to reach $153.2 billion in 2003, a $7 billion increase over 2002.

A majority of full-service restaurant operators said they anticipate business in 2003 to be better than it was in 2002; however, they did indicate that the top operational challenge expected in 2003 would continue to be the uncertain economy.

Sales at limited-service or quick-service restaurants — defined as those chain and independent establishments without wait staff service — are expected to increase by 4.1 percent, with sales totaling $120.9 billion in 2003 (up $4.8 billion from 2002).

Restaurant operators in this segment said their top operational challenge would continue to be recruiting and retaining employees.

Regional Growth

According to the study, 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.

The Mountain States are expected to lead the nation with a projected restaurant sales growth of 6.6 percent. On the other hand, the East North Central region is projected to register sales growth of 4 percent in 2003, the slowest of the nine census regions.

On the state level, Nevada is expected to lead the nation with 7.1 percent sales growth. Arizona follows with 7 percent. Colorado and Utah, both at 6.8 percent, are expected to post the next strongest growth numbers.

Hawaii (3 percent) and the District of Columbia (3.2 percent) are projected to show the lowest growth in sales, associated with weakness in tourism.

Publication date: 01/27/2003

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