Eating out is an important part of daily life in the United States and the trend continues to grow unabated. According to the National Restaurant Association, each American (8 years and older) consumed an average of 4.3 commercially prepared meals per week in 1998, up from 3.9 meals just five years earlier. Consumer spending at eating and drinking establishments is expected to reach $354.0 billion in 1999, up 4.6 percent from 1995. On average, restaurant spending amounted to about $2,400 for each of the nearly 99 million households in the United States. In addition, consumers spend tens of billions at other foodservice locations outside the home, such as lodging places, employee cafeterias, coffee stands, and vending machines. For every dollar spent at food stores, consumers spend about 56 cents at restaurants and bars, up from 32 cents in 1967.

Eating and drinking places consist of restaurants, bars and taverns, and other away-from-home establishments. The National Restaurant Association further analyzes eating and drinking places by various segments:

• commercial, including full-service and limited-service restaurants, cafeterias, caterers, ice cream and yogurt stands, coffee and espresso stands, bars and taverns, hotel and motel restaurants, food contractors, and other (e.g., vending machines);

• institutional, including businesses, schools, hospitals, nursing homes and others that operate their own foodservice; and

• military, including base exchange, and officers’ and non-commissioned officers foodservice

By far, the largest share of eating and drinking sales (91 percent) is in commercial eating and drinking places. The remainder of eating and drinking sales ($32.6 billion) were in institutional and military foodservice operations. According to the National Restaurant Association, sales for all eating and drinking places are estimated to reach $354 billion in 1999, an average annual growth rate of 5.2 percent from 1997. The restaurant industry is mature and sales gains tend to come at the expense of competition. The most pressing challenges facing the industry are the keen competition and the availability of labor.

Table 1

U.S. Eating & Drinking Industry Sales, 1996, 1997, 1998 and 1999
Source: National Restaurant Association

Over 8.2 million U.S. workers and proprietors are employed in the eating and drinking industry, making it the third largest private employment sector (behind health services and business services) in the economy. The industry’s share of total nonfarm jobs rose from 4.5 percent in 1980 to 5.3 percent in 1998, an increase of 3.2 million jobs.

Figure 1

Factors Behind Growth in the Eating and Drinking Industry

The portion of consumers’ food dollars that are spent at eating and drinking places has increased due primarily to demographic trends. First, changes within the American family have expanded the pool of people likely to eat out at restaurants. The most dramatic and significant of these changes is the increased number of married women employed outside the home. In 1970, 43 percent of married women were in the labor force. By 1998, the share of married women in the labor force had increased to about 64 percent. The U.S. Bureau of Labor Statistics estimates continued gains to 67 percent by 2005. Generally, working women have less time to prepare food at home and they generate additional household income that makes eating out an attractive option. Second, the baby-boom generation boasts the highest proportion (72 percent) of two-income families (i.e., both members of the married couple hold jobs). Across all generations, the proportion of two-income families is projected to grow to 64 percent of all married households by 2000; and 80 percent of households headed by individuals aged 25 and 44 years (both married and unmarried) are likely to have two incomes. Given recent findings that two-income households (with incomes between $50,000 and $70,000 in 1994) spend 60 percent more than the average household on food away from home, this trend bodes well for continued healthy spending on eating out. Third, with people marrying later in life and the high divorce rate, there are more one-person households that ever before. People who live alone are more likely to dine out than to prepare home-cooked meals. This trend in buying prepared food has gained further impetus from the growing number of restaurants that offer take-out and delivery service.

Eating and drinking places is one of the largest private industries in Washington State with a total work force of 171,800 employees in 1998, about 7 percent of the total state nonagricultural employment. Employment in eating and drinking has increased as a percentage of total nonfarm employment over the last two decades, primarily reflecting growth in population as well as real increases in income and spending power along with increased tourism activity.

Figure 2

Number of Eating & Drinking Establishments in Washington, 1981-1998
Source: Washington Employment Security Department

For more detail of above graphic

Figure 3

Workers in Washington Eating & Drinking Industry, 1981-1998
Source: Washington Employment Security Department

For more detail of above graphic