Pizza Restaurant & Fast Food Industry Analysis Essays - Fast Food

Pizza: Restaurant & Fast Food Industry Analysis THE RESTAURANT such as eat-at-home foods and supermarket deli take-out arrangements. The business is very capital intensive. It can cost approximately $1 million dollars to open a new fast food store and even more for traditional dining establishments. Most fast food chain restaurants are franchisee operated. The industry is segmented into two major categories: fast food and full-service restaurants. ENVIRONMENT & OVERVIEW OF THE MARKET Traditionally, restaurants (and hotels) have been among the most entrepreneurial of businesses in the sense that the barriers to entry are relatively weak or minor. Factors creating environmental changes were a result of the early 1970's when dual-income families became the norm and generated more disposable income for eating out and leaving less time for cooking at home. The demographic shift, and the restaurant industry's ability to deliver a consistent product, at a reasonable price, has created a generation of U. S. consumers who eat out. Restaur ant sales have grown steadily throughout the 1990's (about 5% in 1999). United States citizens spend nearly half of their food dollars eating out (approximately $350 billion each year). As an introduction to the overall restaurant industry, Graph 1 illustrates Percentage of Market Share Sales by Segment for the Top 100 Restaurants for 1998 and the Second 100 Market Sale Shares by Segment for 1998. 1998 aggregate Restaurant Sales totalled $123.6 and $16.6 billion for a combined total of $140.2 billion. Combined Pizza sales for the 200 chains, as a percentage to aggregate sales, represent 15.96% of market share, or $22.380 billion for pizza segment sales. GRAPH 1 GRAPH 2 Table 1 on Page 4 illustrates Pizza Chains Ranked by the number of U. S. Units for fiscal years ending 1998, 1997 and 1996. The four power players, in the pizza chain industry, dominant