ID NEWS: Technomic forecasts 3.2% growth for restaurants

The $270.9-billion restaurant sector will grow 3.2% in 2004, up from 2.9% in 2003, according to the annual industry forecast report of Technomic, Inc., Chicago, to be released imminently.

As reported by the Wall Street Journal, consumers will dine out more often in 2004 than this year, but the rest of the foodservice industry will remain weak. Restaurant sales growth will not be as robust as in the late 1990s, when restaurants consistently expanded at an annual rte of 4-5%, but the sector is "holding its own" in an uncertain economy.

Technomic projects that full-service restaurants will gain 3.5% in 2004, as compared with 3% for fast food. Specialty and sandwich restaurants will lead fast-food growth. Starbucks Corp. will drive sales in the specialty category, while Quiznos Sub, Panera Bread Co. and Doctor's Associates, Inc.'s Subway Restaurants will bolster the sandwich segment. Even the mature hamburger category is expected to make gains, thanks to a resurgence in McDonald's Corp.'s U.S. sales. Casual dining chains, such as Applebee's International, Inc., and Brinker International, Inc.'s Chili's Grill & Bar, will continue to lead among sit-down establishments.

The rest of the industry, however, will remain flat, primarily because of weakness in the business environment.
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