The Restaurant Industry still recovering from the economic downturn. The restaurant industry is fiercely competitive. The name of the game is convincing consumers that your restaurant offers more than your competition. Last year the game left behind a large number of casualties. In 2011 the number of restaurants in the marketplace declined by 2.5% in the U.S., which represented a net change of 16,000 less restaurants nationwide, according to CDH Expert. The final three months of 2011 saw more restaurants close than any other quarter of the year. Full service restaurants (FSR) suffered more than limited restaurants (LSR) with almost three times the amount of market decline last year.

The full service restaurant market declined by 12,000 operators, or 3.8%, in 2011. Consumers were not as frugal with their dining dollars as the previous 2 years, but fine dining restaurants still struggled shrinking by 4.6% last year. The hardest hit cuisine, in the fine dining segment, was the “steak, seafood & fish” menu type. Fear not diners. Do not reach for that pint of “sadness” ice cream yet; things are not as bad as what we’ve seen in some previous years in fine dining. Chains such as Capital Grill, Morton’s and Ruth’s Chris are holding their own, but have a long road to recovery to be back to where they were in 2008.

Limited service restaurants were not immune to the downturn either, as they declined by 4,000 operators, or 1.3%, in 2011. It will come as no surprise to those in the industry that the independent restaurants were hurt the most. Limited service chains actually increased in 2011 by nearly 1%. Fast casual chains that boast a more fresh, and diverse menu continued to thrive. The news was not so joyful for fast casual’s frozen LSR brethren; the smoothie, juice and frozen dessert menu types, had the largest decline at over 7.3% in 2011.

It is not all doom and gloom. There are some restaurants that diners got “some more” from in 2011. Meat and potatoes reigned supreme as “American traditional”, and “American regional” menu types increased by more than 7.5% throughout the year. Bars & grills and Asian restaurants also were on the rise in 2011 with over a 2% increase in the market.

The 2011 national restaurant executioner did not wield its deadly sword in a democratic fashion. Instead, Alaska’s foodservice market was hit with haymakers decreasing by 7.9% during 2011, while several states such as North Dakota and New Hampshire seemed to bob and weave deftly enough to even see an increase in their own foodservice markets. Oddly enough, the great state of Nevada, the nation’s leader in unemployment, had the highest percentage increase for a state’s foodservice market increasing by almost 5.5% in 2011.

According to Cathy Kearns, General Manager at CHD Expert, “Even with a declining market, consumers still want their food good, and fast. Fast Casual chains are becoming more attractive to consumers, offering a higher quality food than quick service with a perception of being the healthier option. So they’re getting food at a fair price without giving up an hour of their time.”