Restaurants Expect Growth in 2011

The restaurant industry is expected to post a positive growth in 2011 after a three-year period of negative growth. According to the National Restaurant Association, industry sales are projected to increase about 3.6 percent over 2010 sales (1.1 percent when adjusted for inflation). The restaurant industry seems to rise and fall with the stock market, and as the economy is slowly improving, so is the restaurant industry. Quickservice restaurants are expected to see a slightly higher increase in sales than fullservice restaurants. Restaurant industry job growth is also expected to surpass national job growth, adding jobs at 2.4 percent while the national economy is projected to have a 1.8 percent growth. The three companies the have the best relative performance in the market right now are Wendy's/Arby's group, Buffalo Wild Wings, and Starbucks.

For more info, visit:
http://www.restaurant.org/pressroom/pressrelease/?ID=2039
and
http://www.google.com/finance?q=NASDAQ%3AWEN

The Recession's Effect on the Hospitality Industry

The 2008-2009 recession hit every industry around the world very hard. One of the most affected industries, however, was the hospitality and restaurant industry. Before the recession, oil prices were at a all time high, and hotels and travel companies had already started to see a significant decrease in travel and tourism. When the stock market crashed, millions of Americans lost big investments or life savings. At the same time, the housing market collapsed and many homes in America were in foreclosure. Banks were not giving out loans or credit, so discretionary spending plummeted and consumers weren't traveling anywhere. Because Americans had no money to spend, they also were not eating out as often as they might be, so restaurants saw a decline in customers as well. The end of 2008 and all of 2009 was a very difficult time for the hotel and restaurant industry. It has only been since the end of 2010 that this industry has started to see a turn around in it's balance sheets. Consumers are slowly starting to gain confidence in the market once again, and there has been growth in the HRL industry. Nothing is stable yet by any means, but if the stock market continues to grow and Americans increase their spending, this industry will see some large growth .

For more info, visit:
http://digitalcommons.library.unlv.edu/cgi/viewcontent.cgi?article=1565&context=thesesdissertations&sei-redir=1#search=%22recession+effects+on+hospitality%22redir=1#search=%22recession+effects+on+hospitality%22

McDonald's Analyst

In the restaurant industry, specifically McDonald’s, analysts found that MCD’s earnings
in Europe were better than expected, however they were slightly below expectations in the US.
McDonald’s is said to be the best positioned played in the quick-service restaurant segment to
gain market share because it has significant market power. Many analysts are saying “BUY”
to HRL stocks because they have been seeing increases as of the past quarters. The main driver
of growth in this industry is consumer spending. Across the board, consumer spending has
increased in hotels, restaurants, and cruise lines because consumers are now more optimistic and
willing to spend money on vacations and luxury goods.

POSTED BY: KATERINA ARGYROU

Competitive Advantage

Every firm tries to have a competitive advantage but not all achieve this. Many of them do not really understand what competitive advantage is or how to achieve it. A competitive advantage in a Hotel company can be achieved by offering the consumer a better value than other competitive hotels by for example lowering their prices or providing quality services that competitors do not have. A strong competitive advantage can hardly be imitated by other competitive firms.

Competitive advantage can be created if a hotel for example has an activity that creates superior value above its competitors. Companies can differentiate themselves also by the service they offer, products, image, quality and innovations.

                 From my informational interview, Mr. Koulouvatos, told me that Hotel companies differentiate themselves using quality of products as their first priority. On top of the general categorization by stars, hotels even within the same star segment may differ in the level of service offered. Another difference might be in the product itself. Some hotels sell room only whereas others sell all inclusive packages where the guest does not have to pay for any out of pocket expenses. As Mr. Koulouvatos claimed “Obviously, proper marketing that leads to proper pricing is probably the most important factor in promoting our product.”

 POSTED BY: Katerina Argyrou (The blog I could not post last week and I sent by e-mail to Jess.)

http://www.referenceforbusiness.com/management/Bun-Comp/Competitive-Advantage.html http://www.referenceforbusiness.com/management/Bun-Comp/Competitive-Advantage.html

Profit & Loss

What one needs to do in his business is control the number of sales the last 3 years and compare them with each other. The most important year is the present year but one need to examine the 2 years before to see if the company is going better or worse, has increased profits or not. If sales are higher the present year the company is safe.

What one needs to do after is to determine the cost the business has. Examples of these costs are licenses, loan amounts, food costs (for hotels), employers for restaurants and hotels etc.

Everything a business pay (hotels, restaurants) depends on their profits. If their profits are high their costs will increase as the company has more money to spend.

POSTED BY: Katerina Argyros

More info: http://hubpages.com/hub/Restaurant-Profit-Percentage