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Monday, January 03, 2011

Outlook for 2011

I expect 2011 will usher in a new wave of job creation. This wave will take the unemployment rate down below 8% by year end. Some of the job growth will take place in the Rust Belt.

During the holiday season, I traveled to Upstate New York. The General Electric plant in Schenectady was all lit up and there were way more cars in the lot than recent years. GE will be producing batteries. AMD will be opening a brand new chip factory in Malta. The roads have been re-engineered with rotaries to handle the expected traffic volume.

Restaurant dining has become less formal in recent years. I expect this trend to continue with greater speed. Diners want to get out more often than the past few years and they want to be recognized by the management.

On our drive back, we stopped at a restaurant in Binghamton and the owner stood near the door greeting every guest. He was there as we left and we felt the traditional "Thanks for coming! Was everything OK?" seemed 100% genuine. I told him I really enjoyed the salad dressing and rolls. We ordered our salads with oil and vinegar and they offer guests a nice quality extra virgin olive oil and balsamic vinegar.

I'm going to try and patronize independently owned restaurants more this year.

There is a growing awareness of waste in the country. We will see the concern for wasted energy and clean water spread to food. Smaller portions and healthier options will be popular. Whole grain pastas, brown rice, whole grains in bread and rolls and locally grown produce will continue to get visibility in menus.

McDonald's starts the year with $1 for all sizes of coffee and soft drinks. The price pressure on non-alcoholic drinks will continue. Expect your guests to scrutinize their checks looking for prices on specials and drinks. If you price your soft drinks modestly and include the pricing on your menus, the move to complimentary tap water may start to shift back to revenue generating drink options.

With any economic uptick, we can expect market prices to increase. We ended 2010 with higher prices for gas and grains. These markets will be volatile with an upside bias.

I expect the comparable unit sales statistics to be positive in 2011. The strong concepts will see 5% plus growth. Don't expect an immediate turnaround. January is the month of New Year's resolutions which tend to give way around Super Bowl time.

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