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					Bob
O’Brien
The NPD group
 The State of the
 U.S. & Global
Foodservice
Economy
       It’s
       bad
The   Economy
       you
      know
                Not all periods of economic stress resulted in declines in
                                    restaurant demand


                                        Restaurant Industry Traffic Trend - PCYA

8%




6%




4%




2%




 %




-2%




-4%
      '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08




           Source: The NPD Group / NPD Foodservice / CREST                             CONFIDENTIAL: For Client Use Only
                                                Traffic trend was negative for the first time since
                                                                   spring 2003
Total Restaurants
                                                                                       Traffic % Change vs. Year Ago



                                                                                                                                                                        3.2
          2.3                                                                                                                      2.3
                                                                                      1.9 2.2 2.2                                                                                                  2.1
                                                                                                                          1.5               1.6                                                                                1.6
1.0                1.1                                                       0.9                                                                     1.1 1.3                     1.3
                                                                                                                                                                                          0.9                                           0.9
                            0.7                                                                                  0.5                                                                                        0.6 0.6                              0.4 0.5 0.7


                                                                   -0.5
                                                                                                                                                                                                                                                                            -0.8
                                     -1.2                -1.2
                                               -1.8
 JJA'01

          SON'01

                   DJF'02



                                      JJA'02

                                                SON'02
                                                          DJF'03



                                                                             JJA'03

                                                                                      SON'03

                                                                                               DJF'04



                                                                                                                 JJA'04

                                                                                                                          SON'04

                                                                                                                                   DJF'05



                                                                                                                                                      JJA'05

                                                                                                                                                               SON'05
                                                                                                                                                                        DJF'06



                                                                                                                                                                                          JJA'06

                                                                                                                                                                                                   SON'06

                                                                                                                                                                                                             DJF'07



                                                                                                                                                                                                                               JJA'07

                                                                                                                                                                                                                                        SON'07

                                                                                                                                                                                                                                                 DJF'08



                                                                                                                                                                                                                                                                   JJA'08

                                                                                                                                                                                                                                                                             SON'08
                            MAM'02




                                                                    MAM'03




                                                                                                        MAM'04




                                                                                                                                            MAM'05




                                                                                                                                                                                 MAM'06




                                                                                                                                                                                                                      MAM'07




                                                                                                                                                                                                                                                          MAM'08
             Support Trends
• Women’s workforce participation rate flat
  since 2000
• Meals per person flat since 2001
    Segments Weak in 4th Quarter

• QSRs flat
• Midscale down
• Casual Dining down
        Pricing and Promotions
• Checks increasing lower than CPI
• Dealing up in 2008
                 All of the industry’s traffic growth this year sourced
                                      to deal visits
 Total Restaurants                         Traffic % Change vs. Year Ago
YE Nov '08 Traffic 0%

                                                                                         6%


         Deal                                                   1%
        (23% )
Check $5.60                         -1%             -1%                       -1%



       Non-Deal                      2%              2%         2%            2%
        (77% )
Check $6.56                                                                             -1%


                             YE Nov'04 YE Nov'05            YE Nov'06      YE Nov'07 YE Nov'08

           (Share of Traffic YE Nov '08)
         Pricing and Promotions
• Checks increasing lower than CPI
• Dealing up in 2008


• Advertising increase as
  other industries cut back
                              Unit growth came to a halt in
                                          2008

                         Total Restaurant Traffic PCYA vs. Unit Count PCYA
8%


6%                                                          5     5     5           5
       4
                                                                             4
4%                  3                                                  3
                                            3         3    2      2
                        2           2                                              3                                                 2
                1                                                            3                                           2     2
2%                            1                                                                  1              1                           1
                                                2      2                                  1
                                                                                                         0                                        0
            1                           1                                                                                 1    1
                                                                                                 1                   0                      1          0
 %
                                                                                          0              0
-2%                     -1    -1                                                                                                     -1


-4%
      '88       '89     '90   '91   '92     '93      '94   '95   '96   '97   '98   '99   '00    '01     '02    '03       '04   '05   '06   '07   '08

                                                    Total Restaurant Traffic PCYA             Unit Count PCYA




                Source: The NPD Group / NPD Foodservice / CREST                                      CONFIDENTIAL: For Client Use Only
         Business Segments Weak
• Weekends down
• Supper only declining day part
  (2nd year in a row)
• Weekend Supper and Snacks were
  the weakest
• On and Off Premises flat
                    As traffic growth slowed, consumers cut back on
                                       family visits
 Total Restaurants
YE Nov '08 Traffic 0%                                  Traffic % Change vs. Year Ago



   Adult Only                      2%                     2%           1%          1%        2%
   Parties
   (66%)
   Average Party Check: $9.69
                                                                       4%
   Parties with                                            1%                      1%
   Kids                             0%
   (34% )
  Average Party Check: $17.30                                                                -3%

                              YE Nov'04 YE Nov'05                    YE Nov'06   YE Nov'07 YE Nov'08


           (Share of Traffic and Average Party Check - YE Nov '08)
            Consumers age 18-24 cut back on their visits
                         to restaurants.
Meals and Snack Occasions Per Capita by Segment YE November
                                                                             QSR
                        254         260 254
                                                                             FSR
                              233                   235
                                              231
  207 205                                                       209
                                                          204

              168 162                                                       160
                                                                      151




  '07 '08     '07 '08   '07 '08     '07 '08   '07 '08     '07 '08     '07 '08

  Total   Under 18      18-24        25-34     35-49       50-64        65+
Consumers
    Winning Categories
•   “Other” Sandwich
•   Mexican
•   Retail
•   Hamburger
                          Consumer Spending by Country
 Total ‘8 Country*’
Spend* $816 Billion
                               Total Restaurant Away From Home Spend Distribution
                                            Spain
                                      GermanyItaly
                                        France
                                           UK
                                       Japan 0.4%
                                            0.6%
                           Pop: 45M Canada
                                         0.6%
                                         0.4%
                                          0.5%
                                        0.9%
                                      0.3%                                                   Pop: 300M


                   Pop: 60M




            Pop: 83M




                     Pop: 65M
                                                                                             Pop: 33M
                                                                                   US
                                                                                  96.1%
                                     Pop: 61M                                  **Pop: 128M

             *Total is QSR, Full Service, and Retail   ** Population is for entire country
                                                       (*In US Dollars – converted 2/2/09)
                          Consumer Spending by Country
 Total ‘8 Country*’
Spend* $816 Billion
                                   Total Restaurant Away From Home Spend Distribution
                                                  Spain
                           Pop: 45M                                                               US
                                                  6.4%
                                                                                                 44.0%
                                                                                                         Pop: 300M


                   Pop: 60M              Italy
                                         9.2%




            Pop: 83M             Germany
                                   9.2%



                                             France
                     Pop: 65M                                                                  Canada
                                              6.4%                                                       Pop: 33M
                                                                                                4.6%
                                                           UK
                                     Pop: 61M             7.3%             Japan
                                                                                         **Pop: 128M
                                                                           12.8%
             *Total is QSR, Full Service, and Retail             ** Population is for entire country
                                                                 (*In US Dollars – converted 2/2/09)
         Amount spent per Capita (US$) by
                    Country




$1,316            $1,275   $1,230                               $1,266
         $1,060                                        $1,171
                                    $997     $1,015




 US      Canada   Japan     UK      France   Germany    Italy   Spain
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM       11:00 PM

                                                                       US
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                 Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM            8:00 AM            11:00 AM             2:00 PM                5:00 PM     8:00 PM       11:00 PM

                                        US                                                   Canada
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                   Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM    8:00 PM          11:00 PM

                              US                               Canada                               Japan
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                     Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM       11:00 PM

                          US                       Canada                           Japan               UK
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                 Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM       11:00 PM

                       US                Canada                     Japan                   UK       France
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                 Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM       11:00 PM

                    US            Canada                Japan              UK              France    Germany
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                 Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM        11:00 PM
                      US                           Canada                      Japan                UK
                      France                       Germany                     Italy
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                  Source: The NPD Group/CREST*
                                                  Traffic by Time of Day
Total
 25%


 20%


 15%


 10%


  5%


  0%
        5:00 AM           8:00 AM             11:00 AM             2:00 PM                5:00 PM   8:00 PM       11:00 PM
                      US                           Canada                      Japan                UK
                      France                       Germany                     Italy                Spain
  YE November 2008 except Europe = Apr – Nov 2008 Japan represents Tokyo and Osaka only                 Source: The NPD Group/CREST*
                  QSR traffic growth strongest in Japan; France registered the highest
                                          average eater check
Total
                       Components of Spending - % Change vs. Year Ago
 Spend         2.1%           5.3%          -2.1%          1.8%        1.5%             1.8%              -0.9%   -2.1%




   Check

   Traffic



                 US        Canada Japan                        UK    France Germany Italy                         Spain




             YE November 2008 except Europe = Apr – Nov 2008        (*In US Dollars – converted 2/2/09)
             Japan represents Tokyo and Osaka only                  Source: The NPD Group/CREST 
           Industry Structure by Restaurant Segment


                                                         4       7
Retail    13    12                              10
                                19    18
                                                        17
Full      23    28       50                     34
Service                                                          46
                                29    32



                                                        79
                         27
          64    60
QSR                             52    51        56
                                                                 47
                         23


          US   Canada   Japan   UK   France   Germany   Italy   Spain
          Industry Performance by Restaurant Segment


                                                         4       7
Retail    13    12                              10
                                19    18
                                                        17
Full      23    28       50                     34
Service                                                          46
                                29    32



                                                        79
                         27
          64    60
QSR                             52    51        56
                                                                 47
                         23


          US   Canada   Japan   UK   France   Germany   Italy   Spain
                       Global QSR Category Structure

                       3      0                     2
                              4        6     7                        8
                       4      0                               8               11
Frozen Sweets          0      8                                       2
                                                                      0
                                                                      2
                       9                     9     19         7
Varied Menu                   7                               0       7
                                             1                                12
                              0
Travel                 14             33     13     2                          0
                                                    3                          2
                                                                      17
                                                             28                8
Tradi. Dom. Cuisines
                       13                                             0        4
                                       0                                       0
Sandwich/Bakeries                            19
                       0
                       1      53
                                      21           44
Pizza                  16                    5
                                                             21
Fish/Chicken (split)                         12
                       5               7                                      56
Fish Restaurants                       2                      9       63
                                       0     7
                              3                     3
                                                    1
                                       9            0         4
Coffee Specialty                             6
                                                              2
                                       2                      3
                       36                    5                2
Chicken
                              26                   25
                                      20                     17
Burger                                       16                                0
                                                                      0        7
                                                                      2
                       US   Canada   Japan   UK   France   Germany   Italy   Spain
                                                                             40
                Industry Structure by Daypart
Total




Morning                   9     11    15        14
          20     25
Meal                                                             27
                                                        44
                                37              28
                         45           38
Lunch     34     25
                                                                 33
                                                        16
                                                29
                 26             35    23
          30             25
Supper                                                  22       21

                 24                   24        29
PM        16             21     17                      18       19
Snack
          US   Canada   Japan   UK   France   Germany   Italy   Spain
                Industry Performance by Daypart
Total




Morning                   9     11    15        14
          20     25
Meal                                                             27
                                                        44
                                37              28
                         45           38
Lunch     34     25
                                                                 33
                                                        16
                                                29
                 26             35    23
          30             25
Supper                                                  22       21

                 24                   24        29
PM        16             21     17                      18       19
Snack
          US   Canada   Japan   UK   France   Germany   Italy   Spain
                             Industry Deal Rate by Country
                                           Deal Rate – 2008 vs. 2007

             25

                  20             21
                            20                   19
                                      18                                        16             17             16
   QSR                 15                                           16
                                                      13       12                                        13
   Full                                      9             9             9 10             10        10
   Service                                                                           7
   Retail


                  US        Canada               UK        France Germany                Italy      Spain



2007 Deal
             24 19 14       20 21 15        11 20 15       13 13 18      14 15 17    10 14 23       12 14 18
Rate
                               Global Same Store Sales Trends
                                       NPD SalesTrac Same-Store Sales
                                        Percent Change vs. Year Ago




  Sep-     Oct-     Nov-     Dec-     Jan-     Feb-     Mar-    Apr-     May-     Jun- Jul-08 Aug-     Sep-   Oct-   Nov-   Dec-
   07       07       07       07       08       08       08      08       08       08          08       08     08     08     08

                                        Canada        France      UK     Germany         Spain   USA
Adjusted to reflect revised data from a Pizza participant as of Jan ’08 thru Sept. ’08
Restated data to reflect the exclusion of a Specialty participant as of period 08-52
  Sales Figures Reported Weekly Beginning January 5, 2003 Through December 28, 2008
                What now?
• Good long-term opportunity in European
  countries
• New product in Japan for the flat market
• Worried about Canada
  – Maybe for no good reason
                What now?
•   Still more quarters of declines
•   Slow expansion with the recovery
•   Tight pricing and margins
•   Still more on-the-go services and
    products

				
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