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Industry Analysis Limited Service Eating Places Industry

Part I – Industry Definition
Limited-Service Eating Places Industry

"Limited-Service Eating Places in the US" (NAICS 72221 and SIC 5812) is an industry that consist mainly of establishments that provide food service where customers usually order and pay for the items before eating. This industry, which accounts for more than one third of the entire restaurant dining industry, is categorized into three main segments (Bramhall). The first segment is limited service restaurants, which include drive thru and take out facilities. This segment currently has the largest market share. These establishments tend to specialize in limited menu items, such as hamburgers, pizza, sandwiches, and/or chicken (Basham 9). The second segment includes coffee shops, ice cream and donut shops. And the last segment consists of cafeterias. Establishments such as ice cream or yogurt shops, doughnut shops, bagel shops and cookie shops are also categorized under this industry. Key players in this industry are McDonald's Corporation, Starbucks Corporation, Yum! Brands, Incorporated and Doctor's Associates Inc.

Part II – Industry Size, Growth Rate, and Sales Projections
Limited-Service Eating Places Industry

Industry Size – Constant Prices

2002 2003 2004 2005 2006
Industry Revenue 151,934 150,270 155,010 159,350 162,856 $Mil
Number of Establishments 271,640 277,616 284,279 288,259 292,583 Units
Employment 3,579,208 3,625,738 3,676,498 3,716,940 3,754,109 Units

Industry Growth Rate

2002 2003 2004 2005 2006
Industry Revenue (1.8) (1.1) 3.2 2.8 2.2 %
Number of Establishments (1.0) 2.2 2.4 1.4 1.5 %
Employment (1.0) 1.3 1.4 1.1 1.0 %

Industry Sales Projections

2007 2008 2009 2010 2011
Industry Revenue 164,810 169,260 173,830 179,045 183,700 $Mil
Growth 1.2 2.7 2.7 3.0 2.6 %

Graphs

Source: IBISWorld Inc.
Summary

The industry is in the mature stage of its life cycle. Some of the primary reasons for this are that it's in a low growth phase,...