Restaurants See Increasing Revenue Thanks to More Dining Consumers.

Restaurant operators, continuing a trend, last year built fewer new units but bolstered their revenue from existing stores, according to a recent study. The NPD Group Inc., a marketing information firm, said sales gained 6 percent last year across all segments of the $285 billion U.S. foodservice

NPD said the number of new stores in the fast food category grew just 1 percent in 1999. The full-service segment posted no growth in new units. Analysts say the industry has shifted away from rapid distribution to understanding that there is more to building a successful restaurant than just putting up new stores.

NPD said one of the ways the chains have bolstered revenues from existing units appears to be price hikes. Although the restaurant industry has not raised prices beyond the inflation rate more than twice over the past 25 years, NPD noted that the current situation is unique because higher meal costs have not resulted in reduced demand. Demand is not softening due to the strength of the overall economy, along with time-pressed lifestyles that make eating out more commonplace, along with demographic factors: As babyboomers age, they are dining out more, when compared to their young adult children.

NPD says to build same-store sales is to keep restaurants open longer hours.