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					Trends and Directions
Restaurant Business
Environment


Prepared by:

June 2007
    Trends and Directions
    Sponsored by:




     Prepared by:

2    June 2007
    This Morning’s Discussion




3
I. Top 500 Report Snapshot
     Restaurants Industry Experienced
     Growth in 2006




5   Source: 2007 Technomic Top 100 Report
     Beverage Chains Lead LSR Growth




6   Source: 2007 Technomic Top 500 Report
     Despite Negative News, Top 500
     Casual Dining Did Well in 2006




7   Source: 2007 Technomic Top 500 Report
    What Happened in Casual Dining?


                             Polished casual,
     Strong showing
                             specialty players
     by independents
                                  shined




                  Chains added a
                    lot of units

8
     Polished Casual, Specialty Players
     Had Strong Unit Results




9   Source: Technomic Public Company Report
      Casual Dining Chains
      Increased Units Considerably




10   Source: Technomic
II. Macro-Environment Update
     Economy:
     The Good and the Not So Good
                    Steady DPI growth
                    High employment
                    Higher corporate profits
         GOOD       Stock market rally



           NOT SO
            GOOD        Slowing GDP growth
                        Sky-rocketing energy costs
                        Weak dollar, housing sector

12
      GDP Slides in 1Q




13   Source: Blue Chip Economic Indicators
     DPI Still Positive




14   Source: Dept. of Commerce
     New Jobs Still Being Created




15   Source: Bureau of Labor Statistics
      Restaurant Employment Growth
      Remains Healthy




16   Source: Bureau of Economic Analysis
     Inflation Growing in the
     Food Channel




17
III. Operator Environment
      Casual Dining SSS Anemic,
      But LSR Still Growing




19   Source: Technomic Same-Store Sales Report
     Industry Fundamentals Are Still
     Solid, but Dynamics Changing


     Casual dining weak,      Trading down appears
     while LSR remains             to help LSR
           positive




                  Casual dining issues:
                    Rising Menu Prices
                    Consumer “tiredness”
                    Saturation?

20
IV. Industry Growth Update
        and Forecast
      Revised Restaurant Forecasts




22   Source: Technomic
     Reasons for Upward
     Revisions for 2007


       Trade down to                    2007
        benefit LSR            inflation rate: 3.5 %




                    Higher menu
                   prices will boost
                         FSR

23
     Keeping Our Eyes On…
      Economic growth

      DPI, GDP

      Gas prices

      Same-store sales growth

      Public company results


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