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Outlook 2011: Sales, profit and growth projections

NRN survey respondents predict higher sales, profit but conservative growth

Continuing a look at the NRN a.m. 2011 Restaurant Operator Survey, respondents decisively said they expect sales and profit to increase this year over 2010 levels.

More than 130 subscribers to NRN a.m. — the daily e-newsletter from Nation’s Restaurant News — took an online survey last month, helping to shed light on what the industry is expecting in the year ahead.

Beyond positive outlooks for sales and profit, unit growth will remain a challenge for many, the results showed, and restaurateurs were split on whether to invest in redesigns, technology or equipment upgrades in 2011. Workforce reductions moved off the agenda, as respondents will either keep staff levels the same or hire in 2011, and value menus and social media will remain focal points.

NRN is exploring the survey results in a series of articles this week. See Part I, covering industry expectations for the year’s biggest challenges and possible benefits.

Below is a deeper look at sales, profit and unit growth. Thursday, NRN will look at predictions for menu pricing and menu trends.

Of the 132 respondents, 70.2 percent expect their restaurant sales to be better in 2011 than they were in 2010; 27.5 percent expect sales to be about the same as in 2010; and just 2.3 percent said they expect sales to be worse than they were last year.

Expectations for profit also were positive. About 65 percent of the survey respondents expect improved profit at their operations in 2011 versus 2010; about 25 percent predict profit levels about the same as last year's; and 10.8 percent expect their 2011 restaurant profit to be worse than it was in 2010.

Unit growth expectations were not as clear cut as projections for sales and profit growth. About 38.9 percent of respondents expect to open more restaurants in 2011 than they did in 2010, while just a few more, or 39.7 percent of respondents, said they expect no unit growth for their brands in 2011. About 16 percent of respondents said they had been growing on a consistent basis throughout the recession, and 5.3 percent said they would open fewer units in 2011 than they did in 2010.

Contact Sarah Lockyer at [email protected].

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