More People Are Eating Out but Diners Aren’t Splurging

Oct. 3, 2011 - PRLog -- Restaurant operators are reporting that their foot traffic has increased recently but note that their average check is still down when compared to the pre-recession era.

That was one of the insights provided in this week’s “Commercial Real Estate Show,” which examines the state of the U.S. restaurant industry. The show, which is hosted by commercial real estate veteran Michael Bull of Bull Realty, celebrates its one-year anniversary with this episode.

“The prevailing wisdom is that customers, after these past few years, are really tired of depriving themselves of dining out,” said Robin Allen, executive editor of Nation’s Restaurant News. “But given the crazy economic environment, they’re still being very judicious about how much they spend when they go out to eat.”

Citing a recent report by RBC Capital Markets, Allen reported that same-store sales for the restaurant industry were up 2.3 percent in August. In August 2010, sales increased by just 1.2 percent.

Overall, restaurant operators are feeling good about their industry, Allen noted. “They’re saying that maybe the next six months might be difficult, but as they look further out, they’re very, very optimistic,” she said.

Despite the good news, fine-dining restaurants continue to struggle when compared with casual-dining sites, said Peter W. Smith, a partner with the Thompson Hine law firm who represents chefs. “In general, [fine-dining] businesses are off anywhere from 10 to 30 percent in terms of gross revenues — and that’s a good business case,” he said.

“I think that more customers are looking for a good value in a quality product,” said Meredeth Shellnutt, director of franchise development for Mellow Mushroom. “Therefore, they’re not spending as much money on the fine-dining industry.”

In other good news for the industry, restaurant operators are finding favorable rents in some markets. “In some submarkets, there are absolutely incredible rates that used to be $22 per square foot and are now $14 per square foot,” said Bob Kane, vice president of corporate retail services for Bull Realty.

The show, which also discussed site selection, lenders’ attitudes toward restaurants and the restaurant industry’s use of social media, is available for download here. The show airs Saturday in Atlanta on Biz 1190 at 10am ET and on Talk 920 Sunday at 9am ET.

The next “Commercial Real Estate Show” airs October 8 and will provide an update on the U.S. office market.

About the “Commercial Real Estate Show”:

America’s “Commercial Real Estate Show” is an entertaining and enlightening national talk radio show about commercial real estate. New shows air every Saturday morning at 10AM EST available worldwide at the show website, www.CREshow.com as well as on several AM stations including Atlanta stations biz 1190 Saturday at 10 am and talk 920 Sunday at 9am. Show podcasts are available on-demand at any time worldwide on iTunes and on the show website.

The “Commercial Real Estate Show” has quickly gained a national and international audience. Each show starts with a national commercial real estate market update related to the show topic by well-known national experts. Then the show host Michael Bull and a panel of industry expert guests share information, insight and best practices related to each show’s main topic. The show host is 30-year commercial real estate veteran Michael Bull, CCIM, the president and founder of regional commercial brokerage firm Bull Realty, Inc headquartered in Atlanta, Georgia.