Restaurant Supply Needs to Drop for Recovery to Happen

(Dow Jones) Restaurant analysts are hoping for a much steeper drop in the number of locations in 2009 as the industry looks to correct an oversupply of eateries, a problem that is amplified as consumers eat out less. The number of restaurants declined just 0.1% in 2008, according to the research firm NPD Group, a contraction viewed by analysts as too slight, as the amount of money being spent on eating out is spread among too many locations. Growth in the number of fast-food chains ticked up 0.5%, while casual-dining also increased its supply by 0.3% in 2008, according to NPD group. Family-dining and fine-dining restaurants declined 2.8% and 7.5%, respectively. Read more