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Introduction
The food service industry in 2000 continued to grow,
but at a slow pace. Food service firms competed
aggressively with each other and with food retailers
for a bigger share of the consumer food dollar (fig. 4-
1). Supermarkets are attempting to regain food dollars
lost to the foodservice industry by offering their own
menu of fully prepared meals intended for home con-
sumption—widely referred to as Home Meal
Replacement (HMRs). Large food service firms, par-
ticularly fast-food chains, continued to gain market
shares by introducing new products that are heavily
advertised and promoted with coupons and discounts.
These firms also built new units and bought existing
restaurants in prime locations. However, merger activi-
ty was down in 1999 and 2000 compared with earlier
years. Rather, food service firms are entering nontradi-
tional locations such as supermarkets, department
stores, convenience stores, and airports. For example,
Little Caesar’s now reigns in K-Mart stores and
McDonald’s arches grace Wal-Mart.
Also growing more popular is the multiple branding
concept, whereby several restaurant chains operate at
the same location in an attempt to draw more cus-
tomers (ex., Taco Bell and KFC). Chains that engage
in multiple-branding concepts can better absorb fixed
operating costs.
Sales and Leading Firms
Food service sales reached $358 billion in 2000, an
increase of 7.6 percent over 1999 sales (table 4-1).
Separate eating places, which derive revenue mainly
from sales of meals and snacks, accounted for $
billion or 70 percent of total food service sales in
2000. These establishments include full-service restau-
rants, fast-food or quick-service outlets, lunchrooms,
commercial cafeterias, and social caterers. Another 12
percent was accounted for by commercial outlets such
as hotel restaurants and drugstore lunch counters,
recreation and entertainment establishments, and sepa-
rate drinking places (fig. 4-2). Noncommercial seg-
ments of the food service industry—like schools, the
military, and hospitals—made up the remainder of
sales, about $64 billion.
34 ● U.S. Food Marketing System, 2002 / AER-811 Economic Research Service/USDA
Food Service
Charlene Price
America has more than 844,000 food service eating establishments. This number
continues to grow as the share of dollars spent on food away from home increases
(47 percent in 2001). In 2000, food service establishments sold $358 billion worth
of meals and snacks (excluding alcoholic beverages and tax/tips). Real sales rose 5.
percent in 2000, compared with 4.5 percent in 1999. Total food service sales reached
$400 billion in 2001 and are projected to capture 49 percent of the food dollar by the
year 2010.
Figure 4-
Share of U.S. food expenditures for food at
home and away from home, 1960-
Source: ERS, USDA. http://www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/table1.htm
Food away from home
Percent
Food at home
Commercial food service sales reached $294 billion
in 2000, an increase of 8.6 percent over 1999 (table 4-
1). Separate eating places account for the bulk of com-
mercial food service sales. Fast-food outlets accounted
for 50 percent of separate eating place sales in 2000,
followed by restaurants and lunchrooms (46 percent
combined). Fast-food and restaurant/lunchroom sales
totaled $239.2 billion in 2000, which was 67 percent
of total food service sales compared with 65 percent in
1995. Sales in fast-food or quick-service restaurants
are the largest, reaching $125 billion in 2000, up from
1999 sales of $117 billion. Sales at restaurants and
lunchrooms grew 9.7 percent in 2000.
Catering grew most among commercial segments from
1999 to 2000, with sales increasing 70 percent from
$4.0 billion to $6.8 billion. Growth in catering can be
attributed to the growing number of higher-income
households, as well as the rising number of upscale
corporate events, marriages, and other celebrations.
Total sales in the noncommercial segment amounted
to $64 billion in 2000, up 3.1 percent from 1999.
School-based vendors (elementary/secondary schools
and colleges/universities) accounted for the largest
share of noncommercial sales, 40 percent.
Economic Research Service/USDA U.S. Food Marketing System, 2002 / AER-811 ● 35
Table 4.1—U.S. foodservice sales by industry segment, 1993-2000 1
Segment 1993 2 19942 19952 19962 19972 19982 19992 20002
Million Commercial: Separate eating places-- Fast-food outlets 87,218 90,752 96,314 98,356 101,430 105,810 117,446 124, Restaurants and lunchrooms 75,947 80,100 81,502 85,413 96,904 99,898 104,149 114, Cafeterias 3,878 4,143 4,273 4,319 2,579 2,659 2,772 3, Social caterers 1,461 1,616 2,130 2,536 3,209 3,696 4,036 6, Total 168,504 176,611 184,219 190,624 204,122 212,063 228,403 249,
Lodging places 11,157 11,727 12,157 12,601 10,859 11,606 12,315 12, Retail hosts 12,187 13,038 14,212 15,131 15,830 17,014 18,764 19, Recreation and entertainment 8,327 8,764 9,424 10,100 7,616 8,606 9,209 9, Separate drinking places 1,561 1,456 1,480 1,478 1,462 1,477 1,474 1, Commercial feeding total 201,736 211,596 221,492 229,934 239,889 250,766 270,165 293,
Noncommercial: Education-- Elementary and secondary 9,463 9,955 10,400 10,960 11,452 11,866 12,536 12, Colleges and universities 9,737 10,400 10,992 11,416 11,848 12,235 12,590 12, Total 19,200 20,355 21,392 22,376 23,300 24,101 25,126 25, Military-- Troop feeding 984 1,112 1,130 1,102 1,070 1,054 1,040 1, Clubs and exchanges 839 844 850 852 858 881 900 923 Total 1,823 1,956 1,980 1,954 1,928 1,935 1,940 1, Plants & office buildings 5,537 6,230 5,432 5,273 5,315 5,438 5,498 5, Hospitals 3,762 3,646 3,570 3,602 3,576 3,514 3,700 3, Extended care facilities 6,030 5,870 5,758 6,158 6,234 6,268 6,344 6, Vending 4,497 4,187 3,376 2,744 1,876 1,890 1,908 1, Transportation 4,711 4,428 4,101 4,201 4,640 4,720 4,910 4, Assoc., incl. civic, soc. & frat. org. 1,167 1,039 913 738 1,059 1,151 1,232 1, Correctional facilities 2,470 2,710 3,050 3,072 5,578 6,068 6,396 6, Child day care 1,393 1,522 1,675 1,745 1,937 2,054 2,223 2, Elderly feeding 154 177 172 169 174 173 177 182 Other 2,219 2,245 2,326 2,440 2,659 2,599 2,707 2, Noncommercial feeding total 52,963 54,365 53,745 54,472 58,276 59,911 62,161 64, Total 254,699 265,961 275,237 284,406 298,165 310,677 332,326 357, (^1) Excludes sales tax and tips. (^2) Sales reporting based on Standard Industrial Classification (SIC) code definitions.
Sources: Census of Retail Trade, various years and ERS, USDA, Food Markets Branch, (202) 694-5384.
As commercial vendors have taken over food service
operations in some traditionally noncommercial set-
tings (ex., Pizza Hut in schools), noncommercial sales
fell to 18 percent of the food service total compared
with 20 percent just 5 years earlier. Correctional facili-
ties had the highest sales growth among noncommer-
cial segments, 6.8 percent, in 2000 (table 4-1).
The four largest restaurant firms in 2000 sales were
McDonald’s Corporation (including Boston Market,
Donatos Pizza, and Chipotle Mexican Grill); Tricon
Global Restaurants, Inc.; Diageo PLC (Burger King
and Haagen-Dazs); and Wendy’s International, Inc.
(table 4-2).
Leading Franchised Restaurants
Franchised restaurants, both company owned and fran-
chisee owned, are key to the commercial restaurant
industry. The top 50 U.S. restaurant franchisers
accounted for 39 percent of separate eating place sales
in 2000, up from 28 percent in 1999. According to
Technomic, a research consulting firm in Chicago,
sales of the top 50 franchisers in 2000 were $97 bil-
lion, 4.2 percent above sales in 1999. The number of
units operated by the top 50 franchisers increased 1.
percent to 112,201 in 2000. Twenty-five restaurant
chains accounted for 88 percent of the top 50 franchis-
ers’ sales and 85 percent of the top 50 restaurant
chains’ units (table 4-3). Hamburger, pizza, and chick-
en restaurants continue to dominate the commercial
restaurant industry.
McDonald’s, Burger King, Wendy’s, Taco Bell, and
Pizza Hut were the five largest restaurant franchisers
in terms of U.S. sales in 2000. Eighty-five percent of
McDonald’s restaurants are franchised. In 2000, its
U.S. sales amounted to $19.6 billion, up 3 percent
from 1999. Tricon Global’s Taco Bell franchises 80
percent of its units, 75 percent of KFC units, and all
Pizza Hut units. Though sales decreased slightly at
Burger King in 2000, it is still the number two burger
chain at $8.5 billion. In 2000, Burger King had 8,
units and 94 percent were franchised. Sales from
Wendy’s restaurants were up 7 percent in 2000 to $5.
billion. Wendy’s franchises 80 percent of its units.
Taco Bell’s sales fell in 2000 by 1.9 percent, and Pizza
Hut’s sales remained stable at $5 billion (table 4-3).
McDonald’s operated 12,804 restaurants in the U.S in
2000. Subway Sandwiches ranked second with 12,253,
up 3.4 percent from 2000. Among the top 10 franchis-
ers, Applebee’s had the largest growth in units in 2000,
9.5 percent; compared with Wendy’s (4.7 percent),
Subway (3.4 percent), Burger King (2.3 percent), and
McDonald’s (1.4 percent).
Market Share by Type of Food Sold
The National Restaurant Association breaks down
restaurant sales by segment. Among sandwich chains,
McDonald’s and Burger King led with 34 percent and
15 percent of the U.S. market in 2000. Pizza Hut and
Domino’s Pizza led the pizza segment with 42 percent
and 23 percent of the U.S. market. KFC controlled 55
percent of the chicken market, followed by Chick-fil-A
at 13.6 percent and Popeyes at 13.5 percent. Chicken
chains are offering their products in more one-stop
shopping establishments such as grocery stores and
gas stations. They are also emphasizing “home-style”
chicken and an increasing number of side dishes to
compete with the home meal replacement market.
Denny’s accounted for slightly more than 23 percent
of the family restaurants’ market share in 2000, fol-
lowed by International House of Pancakes/IHOP (
percent) and Cracker Barrel (13 percent). Family
chains such as these emphasize value, quality, service,
cleanliness, and convenience and cater to all three
meals—breakfast, lunch, and dinner.
In the grill-buffet segment, Golden Corral held 37
percent of the market in 2000, followed by Ryan’s
Family Steak House (29 percent) and Ponderosa (
percent). Grill-buffet restaurants emphasize budget
dining for the family.
Dinner house restaurants are usually more formal,
upscale eating places. Applebee’s Neighborhood Grill
& Bar accounted for the largest market share in this
category (15 percent), followed by Red Lobster (
percent) and Outback Steakhouse (11 percent).
Two chains control nearly 40 percent of the contract
food service segment. Contract food service compa-
nies provide food and facilities management to corpo-
rate, health care, and education markets. Aramark
Global Food/Leisure Services holds 27 percent of the
contract chains market share, followed by LSG/Sky
Chefs with 9 percent.
Home Meal Replacements, Delis, and Other Take-Out Meals
Supermarkets are jumping on the takeout food band-
wagon with menu offerings of fully prepared meals
Economic Research Service/USDA U.S. Food Marketing System, 2002 / AER-811 ● 37
38 ● U.S. Food Marketing System, 2002 / AER-811 Economic Research Service/USDA
Table 4.2—Top U.S. restaurant companies and chains' sales and number of units
called Home Meal Replacements (HMRs). Technomic,
Inc., a consulting firm in Chicago, reported that HMR
sales by supermarkets rose 3 percent in 1999 to $
billion (overall supermarket sales rose 2.9 percent),
and projects that HMR sales will grow to $15 billion
by 2004.
Although supermarket delis are part of the retail gro-
cery market, they have been one of the fastest growing
outlets for prepared meals and snacks in recent years.
The number of supermarkets with delicatessens
increased steadily after 1982 and began to level off in
1998 (fig. 4-3). Eighty-one percent of all supermarkets
had delicatessens with service employees in 2000. Deli
sales increased 6.1 percent to $13 billion in 2000, the
biggest increase since 1996. The bulk of deli sales
comes from meat and cheese, with prepared foods sec-
ond. Fastest growing categories include chicken, sand-
wiches, and salads (see “Food Retailing”).
According to the Food Institute report for 2000, take-
out food sales totaled $126.4 billion in 1997 and are
expected to reach $195.4 billion in 2007, a 55-percent
increase in just 10 years. Most of the growth will be
generated by supermarkets and full-service restaurants,
with fast-food restaurants, business and industry food
service, and convenience store sales lagging.
According to Takeout Business , in 1997, fast food
accounted for 61.2 percent of total takeout sales, but
by 2007 that number is expected to drop to 57.6 per-
cent, a victim of supermarket, deli/pizza parlor/bagel,
and coffee/donut shop sales.
Nontraditional Food Service Formats
Food service continues to be a growing part of the
convenience store (c-store) industry. According to the
National Association of Convenience Stores (NACS),
food service purchases are trending upward. In 2000,
13.3 percent of all merchandise sales in c-stores, or
$13.8 billion, involved food service products (table 4-
4). Food service (food prepared onsite) accounts for
the largest share of food-related purchases. Branded
fast-food concepts are popular as well, with more than
20 different franchisers established in c-stores. Among
40 ● U.S. Food Marketing System, 2002 / AER-811 Economic Research Service/USDA
Table 4.3—Top 25 franchised U.S. chain restaurants, sales and number of establishments
Company/Chain 2000 1999 Change 2000 1999 Change U.S. sales U.S. sales from 1999 U.S. units U.S. units from 1999 ------- $ million ------- Percent ------- Number ------- Percent
McDonald's 19,572 19,006 3.0 12,804 12,629 1. Burger King 8,543 8,652 -1.3 8,326 8139 2. Wendy's Old Fashioned Hamburgers 5,757 5,371 7.2 5,095 4,868 4. Taco Bell 5,100 5,200 -1.9 6,746 6,879 -1. Pizza Hut 5,000 5,000 0.0 7,927 8,084 -1. KFC 4,400 4,300 2.3 5,364 5,231 2. Subway 3,800 3,200 18.8 12,253 11,845 3. Dairy Queen 2,899 2,831 2.4 5,058 5,113 -1. Domino's Pizza 2,647 2,660 -0.5 4,818 4,629 4. Applebee's Neighborhood Grill & Bar 2,625 2,317 13.3 1,251 1,142 9. Arby's 2,410 2,266 6.4 3,153 3,069 2. Dunkin Donuts 2,324 2,139 8.6 3,643 3,611 0. Denny's 2,164 2,079 4.1 1,751 1,715 2. Hardee's 2,050 2,139 -4.2 2,526 2,673 -5. Outback Steakhouse 2,016 1,759 14.6 611 571 7. Jack in the Box 1,983 1,793 10.6 1,666 1,552 7. Sonic Drive-Ins 1,811 1,643 10.2 2,219 2,056 7. Chili's Grill & Bar 1,695 1,500 13.0 648 597 8. Papa John's 1,669 1,426 17.0 2,533 2,254 12. T.G.I. Friday's 1,480 1,330 11.3 481 438 9. Little Caesars 1,300 1,465 -11.3 3,300 3,700 -10. International House of Pancakes 1,200 1081 11.0 925 859 7. Popeye's Chicken & Biscuits 1,095 954 14.8 1,248 1,160 7. Golden Corral 966 897 7.7 452 455 -0. Carl's Jr. 927 887 4.5 945 908 4.
Total 85,433 81,895 4.3 95,743 94,177 1.
Source: Technomic, Inc.
these are A&W, America’s Favorite Chicken Company,
Arby’s, Baskin-Robbins, Blimpie, Burger King,
Dunkin Donuts, Hardee’s, KFC, Long John Silver’s,
McDonald’s, Pizza Hut, Subway, Taco Bell, Wendy’s,
and White Castle.
Food service operations are also appearing in depart-
ment stores. In 2000, Kmart operated over 1,
instore restaurants in its 2,100-store chain, over 500 of
which were Little Caesars franchises. Kmart is over-
hauling all of its restaurants with Little Caesars,
renaming them KCafes, and discontinuing more than
25 separate agreements with regional and local distrib-
utors for restaurant service.
Wal-Mart stores house 636 McDonald’s. In some loca-
tions, customers can even place a McDonald’s order at
the Wal-Mart checkout, where it is relayed to the
McDonald’s kitchen, usually in the back of the store.
The order can be placed on a credit card and picked up
at the front of the store upon departure. Potential areas
for growth in branded concepts are hospitals, corporate
cafeterias, hotels, and airports.
Employment and Wages
Employees in eating and drinking places numbered 8.
million in 2000, a 1.9-percent increase from 1999
(app. table 11) but down from the 2.5-percent increase
posted in 1999 (excludes all noncommercial eating
facilities and commercial outlets such as hotel restau-
rants, department store coffee shops, and ballpark
food). Although the growth slowed, eating and drink-
ing places added more than 153,000 jobs during the
year, marking the eighth consecutive year in which the
industry’s employment increased by at least 100,000.
This helped solidify the food service industry’s posi-
tion as one of the largest private-sector employers in
the United States, accounting for 57 percent of all food
marketing employees. Average hourly earnings of
workers in eating and drinking places was $6.93 in
2000, up 4.7 percent from 1999 (app. table 27).
The overall restaurant industry—which includes food
contractors, lodging-place restaurants, institutional-
restaurant services, and other foodservice operations—
employed more than 11.3 million people in 2000.
Most tableservice and quickservice operators respond-
ing to a National Restaurant Association survey identi-
fied recruiting and retaining employees as the biggest
challenge in 2000. They reported that the number of
Economic Research Service/USDA U.S. Food Marketing System, 2002 / AER-811 ● 41
Table 4.4—Food service sales in convenience stores, 1997-
Category Instore sales Average store sales Industry total 2000 1999 1998 1997 2000 1999 1998 1997 2000 1999 1998 1997 Percent Dollars $ million Foodservice (food prepared onsite) 3.58 3.42 3.00 3.91 31,146 29,275 23,310 29,600 3.4 3.4 2.3 2. Cold dispensed beverages 2.63 2.93 3.10 3.62 22,881 25,081 24,476 27,403 2.7 2.9 2.4 2. Hot dispensed beverages 3.36 3.30 3.50 2.32 29,232 28,248 27,273 17,562 3.5 3.3 2.6 1. All other foodservice 0.75 0.65 1.17 1.13 6,525 5,564 9,089 8,554 0.8 0.6 0.9 0. Packaged sandwiches 1.01 0.87 0.85 0.79 8,787 7,447 6,605 5,980 1.1 0.9 0.6 0. Frozen dispensed beverages 1.94 2.44 2.18 0.28 16,878 20,886 16,939 2,120 2.1 2.4 1.6 0. Subtotal 13.27 13.61 13.90 12.05 115,449 116,502 107,692 91,219 13.8 13.6 10.4 8.
Total instore 100.00 100.00 100.00 100.00 870,000 856,000 777,000 757,000 104.1 99.8 75.1 72. Note: Food service categories were redefined in 1997; therefore, no comparisons can be made from previous years. Source: State of the Industry Report , National Association of Convenience Stores, 1998-2001.
1982 86 90 94 98 2000
0
20
40
60
80
100
Figure 4-
Share of supermarkets with delis, 1982-
Source: Progressive Grocer.
Percent
Full service Self service
about promotioned offers. McDonald’s has already
successfully used the network in its North Carolina,
Connecticut, and Idaho facilities. For added conven-
ience on vending machines, FreedomPay’s members
can access their account using a keypad. The entire
transaction takes less than 15 seconds. Canteen, the
world’s largest vending company, has signed an
exclusive agreement to install FreedomPay in 50,
vending machines by the end of 2002.
Menu Prices and Firm Profits
Growth in menu prices (average prices as measured by
the CPI for food) slowed for the third consecutive year
in 2000. According to BLS, menu prices increased 2.
percent in 2000, which was down slightly from
increases of 2.8 percent in 1997, 2.6 percent in 1998,
and 2.5 percent in 1999. Growth in menu prices fell
below the overall inflation rate for the first time since
1996. Driven by strong gains in energy prices, overall
Economic Research Service/USDA U.S. Food Marketing System, 2002 / AER-811 ● 43
Significant food service mergers and acquisitions, 1997-
Acquirer Acquired Amount
Compass Holdings, Inc., Daka International, Danvers, MA $200 million
Subsidiary of Compass Group, PLC Daka’s 250 restaurant holdings will be
spun off into a separate company called
Unique Casual Restaurants.
CKE Restaurants, Inc Hardee’s Food Systems, Inc. $277 million +
CKE convertible note.
Grand Metropolitan, PLC Merged with Guinness, PLC, forming —
a new company, Diageo, PLC.
Kitchen Investment Group Country Kitchen $218 million
Long John Silver’s Merged with A&W Restaurants to —
form Yorkshire Global Restaurants.
McDonald’s Boston Market $173.5 million
McDonald’s Donatos Restaurants Undisclosed
Aroma Ltd. Coffee Shoppes Undisclosed
SR Acquisition Corporation Scott’s Restaurants Inc. $236 million
Host America Corp. Lindley Food Service Corp. Undisclosed
Hamden, CT New Haven, CT
Capricorn Investors III L.P. TCBY Enterprises Inc., $140 million
Little Rock, AK
Aramark Ogden Corporation’s $236 million
Philadelphia, PA entertainment division
American Securities Capital El Pollo Loco, a subsidiary of Advantica $128 million
Partners L.P., NY private Restaurant Group, Inc.
investment firm
Source: The Food Institute.
consumer prices increased 3.4 percent in 2000—a full
percentage point above the 2.4-percent increase in
menu prices. In comparison, grocery store prices grew
2.3 percent in 2000. Menu prices at limited-service
restaurants accounted for the strongest growth in 2000.
These prices increased 2.6 percent, versus 2.4 percent
for menu prices at full-service restaurants. Prices at the
establishments serviced by food contractors increased
just 1.2 percent in 2000, while vending and mobile-
vendor prices increased 1.1 percent.
Profit performance varied widely over food service sec-
tor firms. According to Business Week’s Corporate
Scoreboard list, seven food service companies increased
their profits significantly during 2000 (table 4-5).
McDonald’s Corporation—parent to McDonald’s,
Donatos Pizza chain, Boston Market restaurants, and
Chipotle Mexican Grill—had the largest aftertax prof-
its in 2000 of $1.9 billion, a 2-percent increase from
1999. Although profits were up in 2000, McDonald’s
is considering closing 250 poorly performing restau-
rants in view of the European beef safety crisis and
adverse currency movements.
Other firms experienced more dramatic increases in
profits. Wendy’s International—parent to Wendy’s Old
Fashioned Hamburgers, and Tim Horton’s, the number
1 coffee and baked goods chain in Canada—had prof-
its of $169.6 million in 2000, a 42-percent increase
over 1999. Brinker International—one of the largest
casual dining operations in the world, and parent to
Chili’s Grill and Bar, Romano’s Macaroni Grill,
Maggianos Little Italy, On the Border Mexican Grill
and Cantina, and Cozymel’s Coastal Mexican Grill—
had profits in 2000 of $132.7 million, 33 percent
above 1999’s. Darden Restaurants, Inc.—number one
in casual dining, and parent to Red Lobster, the Olive
Garden, and Bahama Breeze Caribbean restaurants—
had profits in 2000 of $191.4 million, up 19 percent.
Mergers and Acquisitions/Divestitures
In 2000, mergers and acquisitions in the food service
industry decreased to 61 from 81 in 1999 (table 4-6).
Of these acquisitions, 47 were by U.S. food service
firms, while 14 were by other types of firms.
Advertising
According to LNA Mediawatch Multi-Media Service,
the top three food service advertisers for 1999 (latest
year available) were McDonald’s Corporation; Tricon
Global Restaurants, Inc., parent to KFC, Taco Bell,
and Pizza Hut; and Diageo PLC, parent to Burger
King (table 4-7). These top three advertisers spent $1.
billion on television advertising in 1999, up 7.2 per-
cent from 1998. Network TV accounted for the largest
share of restaurant advertising, followed by spot TV,
cable TV, and syndicated TV. McDonald’s led in tele-
vision advertising in 1999, spending $626.2 million,
up from $570.9 million in 1998.
Foreign Direct Investment
Foreign-owned firms with U.S. affiliates accounted
for $9.1 billion in eating and drinking place sales in
1998 (last year available), up 31.5 percent from
1997 sales, according to industrywide BEA data
(app. table 43).
44 ● U.S. Food Marketing System, 2002 / AER-811 Economic Research Service/USDA
Table 4.5—Profits of selected foodservice companies, 2000
Profits Change from Return on common equity over Firm 2000 1999 12-month period ending December 2000
$ million ---------- Percent ----------
Bob Evans Farms 50.8 -12 11. Brinker International 132.7 33 16. CBRL Group 61.5 5 7. CKE Restaurants -107.7 NM -21. Darden Restaurants 191.4 19 19. McDonald's 1,977.3 2 22. Sodexho Marriott Services 71.0 42 NM Wendy's International 169.6 2 15.
Note: Profits are from total revenues, which include sales by company-operated restaurants and fees from restaurants operated by franchisees and affiliates. These fees include rent, service fees, and royalties that are based on a percent of sales with specified minimum payments, along with initial fees. NM = Not meaningful.
Source: Business Week , February 26, 2001.
organization in the world, had 14,895 units outside the
U.S. in 2000, operating in 120 countries and territo-
ries. This represents 54 percent of McDonald’s total
units, compared with 53 percent in 1999 (table 4-9).
McDonald’s also leads in foreign sales, accounting for
$20 billion in 2000. Major markets include Canada,
Japan, Germany, England, Australia, and France.
McDonald’s Corporation will open the first Boston
Market restaurant outside the U.S. in Australia in
2002. KFC, a division of Tricon Global, Incorporated,
has the second largest number of international units,
5,974. Fifty-three percent of KFC’s total units operat-
ed overseas with foreign sales totaling $4.8 billion in
Pizza Hut, also a Tricon Global subsidiary, operates
4,157 of its 12,084 units outside the United States.
Pizza Hut’s foreign sales for 2000 totaled $2.6 billion.
References
American Institute of Food Distribution, Inc. The Food
Institute Report. Fair Lawn, NJ. Selected issues.
_____. Mergers and Acquisitions. Elmwood Park, NJ.
Selected issues.
LNA Multi-Media Service. Class/Brand Year-to-Date.
Selected years.
Business Week , February 2001.
Convenience Store News. Selected issues.
Nation’s Restaurant News. Selected issues.
Progressive Grocer. Selected issues.
Restaurant Business. Selected issues.
Supermarket Business. Selected issues.
USDA-ERS, ERS Food Expenditure Series.
U.S. Department of Commerce, Bureau of Economic
Analysis. Census of Retail Trade. Selected issues.
U.S. Department of Labor, Bureau of Labor Statistics,
CPI Detailed Report. Selected issues.
46 ● U.S. Food Marketing System, 2002 / AER-811 Economic Research Service/USDA
