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Restaurants in Florida, 2 other Southeast states post 2008 gains

The nation's restaurant industry may have had a rough time in 2008, but three Southeastern states, including Florida, did not perform quite as poorly.

In fact, restaurant traffic in Florida, Georgia and Alabama was up a modest 2 percent for the year, according to a report compiled by NPD Group. It was among only three regions of the country to show any gain in traffic in what was a flat year nationally.

"Considering the state of the economy there, I was surprised," said Bonnie Riggs, who tracks the industry for NPD Group in Chicago. "Thanks to discounting and customers trading down, they held their own."

Credit the resiliency of moderate-cost fast-food chains like McDonald's and Taco Bell, quick-serve operators like Subway and Panera, and full-service restaurants that pared prices like Red Lobster and Olive Garden.

Meantime, NPD says business in the Southeast got more challenging this year.

Restaurant sales are closely linked to unemployment rates, which nearly doubled in Florida in 2008 and continue to rise in 2009. Also, Florida tourism has been soft, consumer credit is tighter, and discretionary retail sales are weak, Riggs said.

Nationally, restaurant traffic declined 3 percent in January and was down 1 percent in February.

The recession, which began in late 2007, concentrated the most damage on higher-priced, full-service restaurants. Among the first to fall were Roadhouse Grill, Shells, Steak & Ale and all 170 company-owned Bennigan's in the summer. By year's end the three Southeastern states had 1 percent fewer restaurants, NPD reported.

"Small and independent operators were particularly hard hit by closings," Riggs said.

By the second half of 2008, many of those chains — including Applebee's, the Brinker International family that includes Chili's and Tampa-based OSI Restaurant Partners that runs Outback Steakhouse — were reporting high single-digit sales declines.

After a multidecade building binge during the go-go years, the casual sit-down dining sector is overbuilt, some analysts think.

The nation has 49 percent more restaurants than it did in 1990 ,yet the population increased only 23 percent, according to the New York Times. Restaurants' share of the food dollar has grown 8 cents to 48 cents since 1985, according to NPD. But last year the pendulum began to swing back to grocery store takeout food as shoppers trimmed meal spending.

Technomic, a Chicago research firm, estimates 20,000 of today's 537,000 restaurants will close within three years.

Restaurants in Florida, 2 other Southeast states post 2008 gains 04/07/09 [Last modified: Tuesday, April 7, 2009 10:01pm]
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