Why Arn't Buffets Expanding With The American Waistline?

Implications: This article provides the most current, accurate and succinct analysis of the Buffet restaurant industry that I have seen. There has been a dramatic drop in the number of buffet restaurants in the U.S. over the past five years in spite of the steady profits being realized by the major operating companies. Why? What are the expansion strategies of the major buffet operators?

Analysis: U.S. buffet chains, which typicallyoffer 100-plus food choices for well under $10 per person, have been struggling. Sales growth and unit growth have been flat or declining with the Ponderosa and Bonanza concepts shrinking from 620 stores in 1999 to 359 units today.

However, most major players see a bright future . The operators of Old Country Buffet, Home Town Buffet,Ryan's Grill,Buffet & Bakery and Golden Corral, each predict continued growth over the next 5 years but on a highly selective geographical basis. 

They all now recognize that few buffets, regardless of how well operated or conceived, can make money in large urbgan areas. This is particularly true in the Northeast, specifically in Boston, New York and Philadelphia.

Other than the entry of one new player in the buffet sweepstakes, CiCi's Pizza Buffets which has met with considerable success in their more limited menu and smaller store size, virtually all of the planned growth of the major chains will come from fra