Restaurant Industry Research Paper Example | Topics and Well Written Essays - 1750 words

Restaurant Industry - Research Paper Example gross domestic product. The overall economic impact of the restaurant industry is expected to exceed $1.5 trillion in 2008, including sales in related industries such as agriculture, transportation and manufacturing. In addition to being highly competitive, the restaurant industry is often affected by changes in consumer tastes and discretionary spending patterns; changes in general economic conditions; public safety conditions; demographic trends; weather conditions; the cost and availability of raw materials, labor and energy; purchasing power; and government regulations. The restaurant industry faced several economic challenges in 2007, including rising food and labor costs and escalating gasoline prices that caused the revenue growth to remain sluggish. The cost of food and beverages account for approximately 33 cents of every dollar of restaurant sales and is one of the most critical items on their income statements (along with labor costs, which also represent about one-third of restaurant sales). Rising corn prices are a matter of concern as it serves as a primary ingredient in most food items and its steady increase sets off a rippling effect that tends to affect all food prices. The rising gas prices remain the biggest concern for the industry which threatens to strike the budget conscious consumers and their dining preferences. The dining-out i The dining-out industry has also fallen prey to the flood of merger and acquisition activities that creates an instability within the industry. The industry is forecast to under perform the broader market over the next several months and hence potential investors are hesitant and may focus on other sectors. However, long term prospects are excellent with increasing exposure to international markets and the mounting popularity of dining out. The Cheesecake Factory The Cheesecake Factory was the realization of a dream for Oscar and Evelyn Overton who started their business with baking and selling cheesecakes in Los Angeles. The company began operations in 1972 as a baker and distributor of cheesecakes and other bakery products. They opened the first restaurant in 1978 in Beverly Hills, California and thus started the growth of a global chain of restaurants. Currently the company operates 139 dining restaurants under The Cheesecake Factory mark in 34 states and the District of Columbia and 13 under the Grand Lux Caf mark in nine states. The Cheesecake Factory is an upscale dining restaurant that offers over 200 menu items including pizza, seafood, steaks, burgers, salads, sandwiches and desserts, and over 40 varieties of cheesecake and other baked desserts. The restaurant concept strives to provide a distinctive, high quality dining experience at moderate prices by offering an extensive, creative and evolving menu in an upscale, high-energy casu al setting with efficient, attentive and friendly service. Some of their popular cheesecakes include the Original Cheesecake, Godiva Chocolate, Key Lime Cheesecake, Carmel Pecan Turtle, White Chocolate Caramel Macademia Nut and Fresh Strawberry. Corporate Growth Strategies The business strategy is focused on a prudent allocation of capital intended to enhance overall earnings per share growth and increase returns on invested capital. Operationally, the company strives to improve productivity and efficiency through the use of technology and a