NPD Reports Sharpest Decline in Restaurant Industry Traffic since 1981
High unemployment, tight reins on spending, and cut backs by households with children contribute to decline
-- Restaurants & Institutions, July 20, 2009
[PRESS RELEASE]
Restaurant traffic, still feeling the impact of rising unemployment and thrifty consumers, declined in the spring quarter ending May 2009, according to The NPD Group, a leading market research company. NPD's Consumer Reports on Eating Share Trends (CREST) reports that total restaurant industry traffic declined -2.6% for this year’s spring quarter versus the same quarter last year. This is the sharpest decline in industry traffic since 1981.
According to NPD's CREST, consumers, especially households with children, cut back their visits to all segments of restaurants. Parties including children, which represent a third of industry traffic, and adults from households with children, have been cutting back on restaurant visits for the last three quarters. Over half of the industry’s decline this past quarter traced to fewer supper visits from parties with kids. Visits by adults in households without children were stable in the spring quarter.
Traffic was down -2 percent at quick service restaurants (QSR)/fast food, marking seven of the last nine months with declining customer counts. Casual dining declined -4 percent and midscale was down -6 percent. While checks rose +2% in the quarter, the rate of increase failed to offset the decline in traffic; yielding a one percent decline in consumer spending at commercial foodservice this quarter
"The commercial foodservice industry has been struggling since last fall, and it appears that as unemployment increases the struggle is increasing," says Arnie Schwartz, president of U.S. foodservice at NPD. "Dealing, value menus, and attractive price points seem to be supporting some operators who are holding on. Menu innovations in the fast casual and QSR segments have also helped to capture occasions."
Consumers cut back on their foodservice visits at each of the main meal occasions. Supper continued to absorb the steepest decline as consumers pulled back on supper visits at both QSR and full service restaurants and across both on-premises and off-premises visits. Morning meal and lunch also declined across all three segments this spring and each contributed about a fourth of the industry's loss. QSR fared a little better with morning meal and lunch visits than full service restaurants, but still showed softness.
It is going to take continued innovation, creativity, and perseverance to capture share in a market where the pie may not be growing in the near term," said Schwartz
Related Articles:
A Tough Year Ahead, Predicts NPD Group
Current Business Situation Tough, But Opportunity Lies Ahead
No related content found.
