The recession is taking a toll on the full-service restaurant industry due to rising unemployment and declining consumer confidence and household income. Restaurant dining frequency, average spend per visit, and total revenue are projected to decline; since individuals are expected to eat at home more, order fewer courses, and make value purchases. Several restaurant operators will exit the industry and industry consolidation is expected to take place. Below are several factors that can help full-service restaurants survive the current recession and thrive once it ends.

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Alter menu items – restaurant operators should (or continue to) offer more value items to appeal to price sensitive consumers.

Target consumer segments with high disposable income – restaurant operators should target (or continue to target) customers with household income over $50,000 since they account for 70% of the industry’s revenue. Many in this segment have limited time to cook and as a result are willing to eat out.

Meet the preferences and expectations of targeted consumer segments – restaurant operators must (or continue to) meet their customers’ demands which can include various portion sizes, customized orders, healthier options; and exceptional service, hospitality, and ambience.

Improve or close underperforming restaurants – restaurant operators should (or continue to) rationalize underperforming locations to help improve profit margins.

Use technology – restaurant operators should (or continue to) use technology to increase productivity, reduce labor cost, and minimize food wastage since purchases, salaries, and wages represent over 50% of the industry’s cost structure.

Expand internationally – restaurant operators should (or continue to) enter international markets through franchising as saturation in the US full-service restaurant industry increases.

Consumer restaurant expenditure is discretionary and can be reduced, delayed, or canceled at any given moment. By successfully and consistently executing the restaurant survival factors, restaurant operators will have a greater chance of overcoming their current challenges.