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QSR Feature
The Lone Star

Texas vs. the Nation

How the Lone Star state stacks up.

(projected

change)

Total Employment

0809

Real DPI

08-09

Total Pop.

0809

Restaurant Sales

0809

Foodservice Employment

through 2019

Texas

0.2%

2.0%

1.7%

4.0%

23.4%

U.S.

-2.0%

0.2%

1.0%

2.5%

13.8%

More Customers

In addition to its residents eating out more, Texas also has more residents in general. The state’s population, at 24.3 million in 2008, is the second-largest in the country, trailing only California. It’s no coincidence that the state also ranks second only to California in total restaurant sales.

“If you go back since 1991, population growth in Texas has hovered at around 2 percent per year,” says Karl Eschbach, the state demographer and director of the Texas State Data Center at the University of Texas at San Antonio. “That growth has been remarkably sustained over a period approaching 20 years.” Texas was the third-fastest-growing state last year and—with a gain of nearly 500,000—added more people than any other, according to the U.S. Census Bureau.

Driven mainly by the availability of jobs, people have been moving to the state. Since 2000, it has been the third-largest U.S. destination for international migrants, behind New York and California, Eschbach says. It also has the distinction of being the leading destination for state-to-state migrants since 2005, a category in which California and New York rank last and second to last respectively, he adds.

Though Eschbach says growth from migration has a tendency to stagnate during a recession, there are other factors at work ensuring Texas will continue its population growth over the coming years. Because state-to-state migrants tend to be a younger demographic, they’re more likely to start a family in the state in which they’ve settled. Texas’ growing Hispanic population is also a good sign since members of that demographic tend to have more children than average, Eschbach says.

More people means more potential customers for restaurants.

“As we attract a growing population, the restaurant industry grows right along with it,” the TRA’s Jackson says. “We’re still seeing significant expansion in the number of restaurant units built in Texas, as opposed to in other states, where they’re seeing restaurants unfortunately close.”

Despite the NRA’s expectation that Texas will post strong numbers going forward in each of the three key economic indicators for the restaurant industry—total employment, income, and total population—some still doubt the state’s ability to live up to its projected 4 percent sales growth this year.

Individuals and households in Texas are more likely than average to spend at restaurants compared to the national population.”

“We know that in a recession, going out to eat is one of the variable things that people cut back on,” says Daniel Hamermesh, a professor of economics at the University of Texas at Austin. “With that in mind, I’d be surprised to see any growth at all.”

Even Schlotzsky’s Roddy admits the future doesn’t look as rosy as it did last year.

“It’s starting to get to Texas,” he says of the country’s economic downturn. “We’re starting to see the effects. It’s optimistic that the [NRA] is projecting 4 percent sales increases; I’m cautious.”

Only time will tell if the Lone Star state can keep shining.

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Jamie Hartford writes for QSRmagazine.com.