Ch. 15 Retailing

    Restaurants are not the first thing most think about when talking about a retailers but restaurants provide a service with tangible products just like a boutique or drug store. The products restaurants provide are prepared foods. They also provides an intangible service that includes having your order taken and clean up provided by the restaurant both provide an enhanced experience.

A study from the National Restaurant Association shows the average American will spend 48% of their food budget on eating out. Americans can afford this lifestyle because of larger household incomes. Most American families have incomes from both parents. For these types of families there is less time to cook at home making eating out convenient and affordable.


Consumers have a wide variety of take-out choices on any given night so how do they decide? Some families choose food that delivers such as pizza and chinese food, both are very affordable. Families on the go may choose drive through restaurants that offer value menus that start at $1 per item. Another popular option is the casual dining restaurant which includes Applebee's T.G.I.Fridays, Dallas BBQ's and other dine-in restaurants. All these have similar price points, an All American cuisine, and are located in shopping centers near populated residential areas.


Hard Rock Cafes are do not profit from the local family consumer. Meals eaten at HRC's are not the typical 5.8 prepared meals the average American eats weekly. Prices and location leave HRC's to tourist and weekend family outings. HRC's are built near hotels and arenas usually in a city's downtown area. Prices are higher than popular chain restaurants but HRC's offer the same type of food.


Guest that dine at HRC are staying at a near by hotel or are attending a sporting event or concert. The way HRC make up for the lack of local business is to sell souvenirs at their Rock Shop and a higher price point on food. HRC do not offer deals or happy hour specials that would attract locals to frequent the restaurant during the week.  These are some interesting facts from The National Restaurant Association website:

• 1.3 million: Number of positions the restaurant industry will add in the next decade
• 34 jobs are generated from every additional million dollars in restaurant sales
• $1.7 billion: Restaurant-industry sales on a typical day in 2011
• 80 percent of restaurant owners started their industry careers at entry-level positions
• 46 percent of restaurant employees say they would like to own their own restaurant some day
• 88 percent of adults say they enjoy going to restaurants
• 71 percent of adults say they try to eat healthier now at restaurants than they did two years ago
• 47 percent of adults say they would patronize food trucks
• 69 percent of adults say they are more likely to visit a restaurant that offers food grown or raised in an organic or environmentally-friendly way
• http://www.restaurant.org/research/facts/