The restaurant industry is expected to continue on a slow recovery in 2011, as consumers start spending more on little luxuries such as eating out.
That should bring higher sales for Central Florida restaurant chains such as Darden Restaurants and Ruth's Chris Steak House.
Industry-analyst firms such NPD Group and Technomic are forecasting slight increases in the number of diners and sales this year.
"I think you'll see more returning to casual dining," said Rick Van Warner, president of Orlando-based restaurant and retail consulting firm Parquet Group. But with unemployment high and the housing market still in bad shape, "this is a very, very slow crawl out of the situation."
Overall sales fell 1.4 percent to $7.1 billion for Darden, owner of Red Lobster, Olive Garden and other chains, in fiscal 2010. So far in fiscal 2011, which began in June, sales have increased over last year.
"The worst seems to be behind both our economy and our industry," Darden Chairman and Chief Executive Officer Clarence Otis said last month in a call with analysts.
Darden predicts5 to 6% growth
Darden — Orlando's only Fortune 500 company — expects between 5 to 6 percent growth in sales this fiscal year. It is opening between 70 and 75 new restaurants, including Bahama Breeze in Kissimmee and, near Disney, the first LongHorn Steakhouse designed to get Leadership in Energy and Environmental Design (LEED) certification.
The company will also make a foray into international territory this year for the first time in years. It will begin building Olive Gardens, Red Lobsters and LongHorn Steakhouses in the Middle East. The company also is looking at opening in Mexico and sees possibilities in Brazil and South Korea.
LongHorn has performed especially well lately, and Darden decided to accelerate the pace of remodeling those restaurants. The new understated look is already present in some newer LongHorns including one at Winter Garden Village at Fowler Groves.
Darden expects to finish remodeling all LongHorns around the country by August.
Darden is also remodeling its Olive Garden and Red Lobster chains around the country, though those efforts will take longer.
Darden's higher-end brands including Capital Grille, an upscale steakhouse hit hard by the recession, have experienced sizable jumps in sales lately.
Ruth's back onthe growth track
Lake Mary-based Ruth's Chris Steak House also has seen some improvement and is slowly growing again. Parent company Ruth's Hospitality Group said in a recent earnings call it has plans for 17 future franchise restaurants over the next several years. Ruth's is looking to build its own restaurants in casinos and hotels.
Ruth's is focusing on growing Mitchell's Fish Market, a small, more moderately priced chain that made its Central Florida debut in 2010.
"Fine dining, I think it remains a tougher road," Van Warner said. "I don't really believe that things will necessarily ever get back to what they once were in sort of the easy credit, inflated boom times."
Another more casual chain, Orlando-based Smokey Bones, will have new leadership now that its president and chief executive officer Ian Baines has left. Baines led Smokey Bones through a dramatic makeover after Darden sold it three years ago, taking the focus off barbecue and creating an edgy new image.
The chain is expected to finish remodeling its restaurants this year and start opening new ones.
Tijuana Flats to add more restaurants
With quick service and lower prices, fast-casual restaurants have done well and continue to expand. Maitland-based Tijuana Flats plans to open 12 to 15 new restaurants this year, with a heavy focus in South Florida and North Carolina. In Central Florida,
Tijuana Flats executives will focus on their new concept, Tibby's New Orleans Kitchen, scheduled to open during the first quarter.
The industry faces many challenges as well in the coming year.
Many restaurants that held off on price increases during the recession have started to raise them or plan to do so soon because of rising food costs.
Already, restaurants are preparing for federally mandated rules requiring them to list the nutritional values of their menu offerings. There have been calls for everything from federal regulation of salt to a tax on sodas.
Even if laws don't change, restaurants face increasing public pressure to offer healthier food.
"That's definitely the pressure that is coming to bear on restaurants on all types of nutritional issues. There's definitely a war under way against the restaurant industry in terms of health and nutrition," Van Warner said. "Restaurants have a lot more things on their plates to contend with."