Italian Restaurant Business Plan - Market and Industry Analysis Page 6

The most important trend that matters to us is of course the expenditure on foods away from home. It is significant to note that while this expense of 5.60% of total expenditure does not mean that all the money is spent on full service restaurants let alone fine Italian dining, it does however show that the consumers preferences nationally towards eating out have not changed significantly between 1996 and 2006 (the last year for which this data was available).

Clearly, as long as this trend of consumption of food away from home continues, all food purveyors including fast food shops, limited service restaurants and full service restaurants like us will do well. It is important to note that the 10 year period covered above does not cover a protracted recession but does include the slowdown of 2001 – 2002 during which the spending habits of the national population did not change towards outside food consumption.

Average Annual Household Food Expenditures: 1996 to 2006

Year	No. of households (000)	Avg. Annual Expenditure	Expenditure: food at home	Expenditure: food away from home	Total Expenditure on food	Expenditure on Alcoholic beverages

1996	104,212	$33,797	$2,876	$1,823	$4,699	$309
1997	105,576	$34,819	$2,880	$1,921	$4,801	$309
1998	107,182	$35,535	$2,780	$2,030	$4,810	$309
1999	108,465	$36,995	$2,915	$2,116	$5,031	$318
2000	109,367	$38,045	$3,021	$2,137	$5,158	$372
2001	110,339	$39,518	$3,086	$2,235	$5,321	$349
2002	112,108	$40,677	$3,099	$2,276	$5,375	$376
2003	115,356	$40,817	$3,129	$2,211	$5,340	$391
2004	116,282	$43,395	$3,347	$2,434	$5,781	$459
2005	117,356	$46,409	$3,297	$2,634	$5,931	$426
2006	118,843	$48,398	$3,417	$2,694	$6,111	$497

Food away from home as a % of Total Household Expenditure in 1996						5.39%

Food away from home as a % of Total Household Expenditure in 2006						5.57%

4.10 Industry Analysis: Wholesale Price Index v/s foods and feeds

Wholesale prices tend to behave more erratically as is obvious in this chart above that compares the wholesale price index value with the foods and feeds component value of the index. We can see that prices of foods and feeds have lagged behind the wholesale price index for all commodities for the past 3 or so years after leading the index for 2 years prior to that.

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Italian Restaurant Business Plan - Market and Industry Analysis Page 6

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