"The climate couldn't be better for prosperity in the Texas foodservice industry," said TRA Director of PR/Research Denise Grasso. "The state's population has been riding a decade-long growth surge, unemployment is reaching record lows and there are healthy gains in personal income growth." Grasso says in addition to the economy, busier consumer lifestyles are causing Texans to look to restaurants to relieve their hectic schedules during the week and as an escape on the weekend.

Metro Area Highlights

Metro Markets With "Off the Chart" Growth

According to the Forecast, while most metro areas around the state will post healthy sales gains, some are making a splash with record growth.  The stabilized peso, combined with major expansion in the healthcare industry, has paved the way for Laredo to become the fastest-growing foodservice market in the state in 1999 (up 13 percent over 1998 foodservice sales).

The Austin-San Marcos restaurant industry is still booming as a result of its high-tech giant employers, with a growth rate of 12.5 percent. Fort Worth-Arlington has built its reputation as a true tourist destination, causing foodservice sales to grow at the third-fastest rate (10.1 percent).

Top 10 Fastest Growing Markets (Metropolitan Statistical Area / 1999 Growth Rate)

1.     Laredo  13.0%
2.     Austin-San Marcos  12.5%
3.     Fort Worth-Arlington  10.1%
4.     McAllen-Edinburg-Mission    9.9%
5.     Dallas  9.0%
6.     Houston  8.9%
7.     Tyler  7.7%
8.     Bryan-College Station  7.1%
9.     Abilene  6.1%
10.     El Paso  5.8%

Houston and Dallas metro foodservice sales are both expected to increase 9 percent this year.  Houston, however, with $5 billion in sales, will hold its position as the largest foodservice industry in the state.  The Dallas metro restaurant industry, still a giant, is expected to post sales totaling $4.7 billion this year.  Fort Worth-Arlington's robust growth rate has positioned the area as the third largest foodservice market in Texas, with sales expected to total $2.5 billion.

Top 10 Largest Markets by Gross Sales (Metropolitan Statistical Area / 1999 Sales)

1.     Houston  $5,037,695,454
2.     Dallas   $4,712,603,870
3.     Fort Worth-Arlington  $2,504,812,650
4.     San Antonio   $2,311,710,225
5.     Austin-San Marcos   $1,810,032,468
6.     El Paso    $574,236,644
7.     Corpus Christi    $440,752,963
8.     McAllen-Edinburg-Mission   $395,074,592
9.     Beaumont-Port Arthur-Orange  $361,949,415
10.     Lubbock  $331,772,480

The study found that the average Texan will spend approximately $1,141 dining out in 1999.  Some metro areas, however, will significantly exceed state averages.  Austin-San Marcos residents will spend approximately $1,588; Fort Worth-Arlington diners will spend $1,546; San Antonio residents will spend $1,482; Dallas restaurant-goers will spend $1,434; Lubbock area residents will spend $1,428; and Houston area diners will spend $1,261.

Challenges Resulting from Growth

While the consensus around the state and each metro area is to expect overall sales increases for the restaurant industry, a high number of new restaurant chains and independents has forced most restaurateurs to become creative in order to capture their share of the pie.  Due to harsh competition around the state, restaurants are diversifying their concepts, offering entertainment for children and providing the highest-quality food.

Another major challenge for restaurateurs this year continues to be finding and retaining quality employees. While low unemployment reflects a healthy economy, it also contributes to a major labor shortage for restaurants. For more information on the 1999 Texas Foodservice Forecast, please call TRA's research department at 512-457-4100 or 800-395-2872.