Survey shows growth in Dallas restaurant scene despite recent closures

by PegNews wire

Statistics indicate the North Texas restaurant industry experienced growth in the twelve months from April 2007 to March 2008, according to research commissioned by the Greater Dallas Restaurant Association.

The study, done by Virtue Group, shows new restaurant openings in the region increased by 22 percent, while alcohol sales in restaurants grew by 7.4 percent. According to Virtue Group, alcohol sales in restaurants are closely tied with food sales in the North Texas region and are a good indicator of the growth of overall restaurant sales.

"As the North Texas area is developed, the restaurant industry is growing with it," said Jamee Green, executive director of the Greater Dallas Restaurant Association. "The number of new restaurants in Dallas County also increased by 22 percent, definitely an indicator of healthy growth."

For the past 12 months, North Texas restaurants sold close to $1 billion in beer, wine and liquor. Sales per establishment increased by 4.7 percent and the number of establishments selling beer, wine and liquor increased by 2.6 percent from the previous year. Dallas County has the highest average sales per establishment, with Fannin County the lowest. Alcohol sales grew the fastest in Rockwall County, which also experienced the highest amount of new unit growth.

From April 2007 to March 2008, 3,277 restaurants opened or changed hands, an increase of 22 percent over the previous twelve month period. Rockwall County had the largest increase in the number of new and changing restaurants in the region, with 73 percent more new openings than the last period. Fannin County saw the smallest increase, with five percent more new openings this period over last period.

The study defined the North Texas region as including the nine counties of Collin, Fannin, Grayson, Denton, Hunt, Rockwall, Kaufman, Ellis and Dallas.

While restaurant openings have increased, some Dallas-area restaurants have closed their doors in recent months. Like many other industries, restaurants have been facing growing costs for many months. According to reports from the National Restaurant Association, the wholesale food price inflation is the highest it has been in 27 years. Last year, wholesale food prices rose 7.6 percent. In the first quarter of 2008, wholesale food prices continued to rise at a rate of 8.5 percent. Restaurateurs reported that the economic slowdown, followed closely by increasing food costs, remain two of the top challenges for the industry.

While some sectors of the restaurant industry are faltering, some are thriving, according to the GDRA. There are many contributing factors to the success of those restaurants that are holding steady. Some include location, average price points and sustained business levels. However, one key factor is the flexibility of a restaurant's business model. In light of the recent closings, GDRA released a statement on the industry, reporting that "As with any business, restaurants that are able to adapt quickly to changing economic and business trends are better able to weather difficult times. Those who are able to do so, without passing large increased costs onto the customer, will survive this economic wave, as well."

"While it is devastating to see some who have had to close their doors, the Greater Dallas Restaurant Association, Texas Restaurant Association and National Restaurant Association are working together to bolster and support the restaurant industry. From lobbying Congress to instituting policies that do not force our needs for food and fuel to compete against each other, to implementing educational and marketing initiatives at the local restaurant level, their goal is to do whatever they can to assist restaurants in successfully managing the economic and business challenges during this time."

"We are providing advocacy, counsel and good, productive dialogue among restaurant and hospitality industry members in North Texas as we all work through these economic changes and dynamics," said Jamee Green, Executive Director, Greater Dallas Restaurant Association. "Dallas continues to lead the country with strong innovation in the dining experience. It's still a wonderful time for consumers to enjoy dining out, as all of us work to provide the best to guests."

Source: GDRA