At what point will restaurant contraction stop? The restaurant industry has gone through an unprecedented contraction in the past couple of years, but there seems to be some differing views as to whether that contraction should continue. Goldman Sachs analyst Michael Kelter recently indicated that supply is "constrained." He noted that 11,000 restaurant closures have put the per-capita supply all the way back to 1986 levels, and has a bullish view of the industry as a result. We would not give that same label to Jeffrey Bernstein. The Barclays Capital analyst said recently that supply must still come down, and he predicted in a recent note that the industry should lose as much as 1 percent of its units in the next year. We've held the view that the industry overbuilt, and that the recession provided a correction. But the shrinkage must stop sometime, and a more accurate view may be that the industry will continue shifting away from casual dining and toward limited-service concepts.