Exploring the Impacts of Key Economic Indicators and Economic Recessions in the Restaurant Industry

Abstract

The purpose of this study is to investigate the major economic variables associated with sales at full-service restaurants. The study also examines if there is any cyclical movement in the full-service restaurant segment in conjunction with economic recession periods. A Pearson correlation analysis and a 5-year moving average method were used to identify the relationships between full-service restaurant sales and key economic indicators, as well as the existence of a business cycle in the full-service restaurant industry for the past 4 decades, respectively. The results of this study revealed that gross domestic product is positively correlated with the sales of full-service restaurants. The 5-year moving average of sales generated at full-service restaurants indicates that the sales at full-service restaurants show a pattern of a business cycle almost every 10 years.