Why Do Restaurants Fail? Part III: An Analysis of Macro and Micro Factors

Abstract

Restaurants are a significant part of American life. According to the National Restaurant Association (2009), total revenues for the restaurant industry exceed $580 billion with nearly 1,000,000 operating restaurants in the US; providing jobs for over 13 million people. The sizeable economic impact of the restaurant industry can be measured by the 4% contribution it makes to the Gross Domestic Product in the United States. In addition, the restaurant industry has been expanding at a steady rate of 2 to 4 % over the past three decades. In 2009, despite the economic downturn, the restaurant industry grew by 2.5% (NRA, 2009). The restaurant and foodservice industry continues to be one of the largest private sector employers in the United States with a projected increase of 1 million jobs by the year 2020 (www.restaurant.org ). In 2010, the restaurant industry added 24,000 new jobs and nearly 84,000 jobs in first three quarters of the 2010 (www.restaurant.org ). With one in three Americans having worked in this industry at least once in their life time and two in five agreeing that ordering food from restaurants make them more productive in their daily life, restaurants are an integral part of American society.