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Free Sample Indian Restaurant Business Plan - Page 7

4.7  Industry Analysis: Household Food Expenditure Analysis

In the following table we have analyzed the major trends that affect our industry and that is the amount spent by households. While the larger survey deals with monies spent by a household on every item, we have decided to focus on the part that matters the most to us and that of course the amount of money spent by households nationally on foods away from home.

In 1997 we find that out of the total 104 million households in the nation the average annual expenditure was approximately $33k per household. Of this $2,876 or roughly 8.50% of the total household expenditure was spent on foods consumed at home. Another $1,823 or roughly 5.40% was spent on foods away from home. Also, $ 309 or roughly 0.90% was spent on alcoholic beverages.

When we look at 2007 we find that out of the 118 million households in the nation, the average annual expenditure is $48,398. Of this $ 3,417 or 7.06% of the total expenditure was spent on food consumed at home. Another $2,694 or roughly 5.60% was spent on food away from home. Alcoholic beverages consumption remained roughly the same at 1% or $497 in 2007.

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 2007.

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: 1997 to 2007
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
1997	104,212	$33,797	$2,876	$1,823	$4,699	$309
1998	105,576	$34,819	$2,880	$1,921	$4,801	$309
1999	107,182	$35,535	$2,780	$2,030	$4,810	$309
2000	108,465	$36,995	$2,915	$2,116	$5,031	$318
2001	109,367	$38,045	$3,021	$2,137	$5,158	$372
2002	110,339	$39,518	$3,086	$2,235	$5,321	$349
2003	112,108	$40,677	$3,099	$2,276	$5,375	$376
2004	115,356	$40,817	$3,129	$2,211	$5,340	$391
2005	116,282	$43,395	$3,347	$2,434	$5,781	$459
2006	117,356	$46,409	$3,297	$2,634	$5,931	$426
2007	118,843	$48,398	$3,417	$2,694	$6,111	$497
Food away from home as a % of Total Household Expenditure in 1997						5.39%
Food away from home as a % of Total Household Expenditure in 2007						5.57%

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