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« Elsewhere | Main | The New York Times Takes Marching Orders From 2Blowhards »

March 11, 2004

Restaurant Realities

Dear Friedrich --

I often love those little info-graphics in USA Today -- Snapshots, I see they call them. Today's is about restaurant traffic: How many meals are bought in which category of restaurant? The data come from a study done by NPD Group at the end of last year. The results? 74% of restaurant meals are bought from fast-food places; 14% from midscale restaurants; and 11% from "casual" places.

I was surprised by fast food's 74% -- but now that I think of it, I'm surprised I was surprised. People picking up burgers without leaving the car, kids wanting more fries, people stopping while on trips ... Of course the figure would be really high. What surprises me most is the number of meals bought from what the study calls "fine dining" restaurants: 1%. I'd have guessed that figure would be quite a lot higher -- 5 or 10%. Shows you how bad my gambling instincts are. Also shows you what a minority taste -- or at least what a luxury -- tiptop food is too, I guess.

USA Today's site is here. I can't find this particular Snapshot online.



PS: People interested in the book publishing biz should enjoy a couple of long-view stories the newspaper is running in conjunction with the 10th anniversary of their bestseller list, here and here . One interesting factlet from among many: it's guesstimated that 7 out of 10 books either lose money or barely break even. I blogged here about bestseller lists, and about how USA Today's is the best of the bunch. You can eyeball their bestseller list here.

posted by Michael at March 11, 2004


I'm not too surprised about your postscript. In the music business, popular lore has it that 97% or more of all records lose money. Mind you most of them deserve to, but that's another story.

There are a problems with figures like that, though. The most obvious, if you are familiar with accounting in the arts, is figuring out just what losing money means. I know more about music in retail than books, but I believe the problems are endemic to both industries. For a CD you must wonder first if anyone made money (the record label generally comes in first here, after the attorneys of course, and sometimes the managers, and then there's the producer, and and and). If so, then you have to figure out if it made enough money. Later the accounting department can concern itself with whether it's politic to call the CD "profitable."

Big companies control distribution, and much of the money that needs to be counted drops from the pocket to be caught in a related outstretched hand. That's one great mystery. Also, artists recoup at a percentage of receipts, so that - for example - a band might recoup at a 20% rate for a record. This means that on, say, an outlay of $1 million, the record would need to bring in $5 million before the artist is recouped (20% of $5 million is $1 million, which is what the "cost" is supposed to be - here the artist is only making 20 cents on the incoming dollar, trying to pay back a big bill pennies at a time).

If you've been watching, what actually happened in this example is that the project brought in $5 million on a $1 million outlay, leaving $4 million of what one might call profit - if one does not work in the music biz. As we stand today, the Big Label has $4 million clams on the plus side, but the press can be told that the album did not recoup. Let's take it as a given that big companies have big expenses - staff, rent, insurance, hookers, blow - and someone has to pay for all that. Still, the line of profit is a wiggly one, and if the record doesn't recoup then the artist doesn't get paid. So there is a financial interest for the industry in having records "fail," if I've been clear.

My own company is a little teeny label, so it's much easier for us to tell. If the money starts with a minus sign, we were not profitable. If it's actually in the bank, we made money.

Both publishing and music - movies too - are set up in a strange hierarchy that rewards spectacular success and doesn't much care about small victories. In a better environment, companies would thrive by cultivating many small plus signs. The reality of executive-driven big business, though, with its big-bonus culture, is that small projects feed reasonably but not to excess, whereas a tidal wave washes away all sins. So the industry is devoted to vast scale - Stephen King and John Grisham and the like, in the book world - and the rest forage where they may.

Oops, sorry, that got long.

Posted by: Linus on March 11, 2004 9:02 PM

Thanks, fascinating. Actually, with books, I was surprised that only 7 of ten were guesstimated to lose money. I'd expect the figure to be more like 9 of 10. Though, as you say, how can anyone really determine that? It's a major pain to get a trustworthy accounting done on your project, and most projects are such small potatoes that it isn't worth the effort anyway. It's quite startling to attend a books convention, see the people milling about -- there's usually 25,000ish visitors -- and realize that nearly all these people are making their living off of the book business, while the number of people actually making a living from creating books (writers, artists, etc) is much, much smaller. The arts life can be a pretty crazy one.

Posted by: Michael Blowhard on March 11, 2004 11:16 PM

What's the difference between "midscale" and "fine dining"? If "casual" is your corner bistro, and "fine dining" is, oh, say, Daniel or the Four Seasons, then maybe "midscale" would include Vietnamese fusion restaurants on Avenue C with extremely good (if pricey) sake. In which case the numbers would make perfect sense.

On the other hand, if "casual" is a truck-stop diner, "midscale" is anywhere serving wine, and "fine dining" is anywhere with a wine list longer than half a dozen bottles, then I'm with you. I guess it all depends on where you draw the lines.

It's worth remembering, too, that much of America has almost no access to "fine dining" establishments, however defined.

Posted by: Felix on March 12, 2004 2:41 PM

And how about a soul-food shack in Mississippi? How would that be categorized? The Wife and I had some of our best meals ever at such places. They were fine indeed.

Posted by: Michael Blowhard on March 12, 2004 3:10 PM

As Garry Trudeau put it, "We're Eating More Beets!"

Posted by: Tim Hulsey on March 12, 2004 8:45 PM

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