2011 Outlook for the U.S. Restaurant Industry
NEW YORK--(BUSINESS WIRE)--Suffering from “frugality fatigue,” American consumers are ready to get back to spending money in restaurants this year, according to Bob Bielinski, head of theRestaurant Industry Practice within Corporate Finance at CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies. This is just one insight Bielinski offers in his “2011 Outlook for the U.S. Restaurant Industry,” where he discusses consumer behavior, as well as the challenges and opportunities facing restaurant CEOs today.
The interview is part of the latest installment of CIT’s award-winning “5 Minute Capital” (www.5minutecapital.com) podcast series, featuring senior CIT executive commentary on current market conditions and industry trends.
Close to 10 percent of our nation’s workforce is employed by the restaurant industry, which makes it the nation’s largest private sector employer according to the National Restaurant Association. Bielinski says, “You’ve seen casual dining firms rebound (from the recession) quite nicely and I think people are very optimistic about 2011… The restaurant industry is a very competitive business and CEOs are looking for ways to grow their business.”
One area poised for growth is the fast casual restaurant industry. In discussing the challenges facing established franchises vs. start-ups, Bielinski says, “It’s difficult to be a start-up restaurant company today. It’s hard to find capital; it’s hard to get the consumer’s attention. The smaller start-up brands need to rely on word of mouth… if you can show the capital markets that you have momentum and you have a brand, you’ll attract the money you need to grow.”
Bielinski says there is financing available for the restaurant industry – particularly for larger brands with middle market lenders that are returning to the business, as well as opportunities for smaller brands with private equity firms. Regarding the impact that recent changes to the Small Business Administration will have on restaurants’ growth opportunities, Bielinski says, “It’s actually very exciting for smaller businesses. Most importantly they raised the maximum loan size… And that is very significant for smaller companies because with $5 million you may actually be able to grow enough to the point where you are funding your own growth.”
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Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance. www.cit.com.