A slow recovering economy has continued to hit the restaurant industry hard. According to The NPD Group, U.S. restaurant visits have declined for the eighth consecutive quarter this past spring, but the rate of decline stopped over the same quarter a year ago.
The NPD’s foodservice market research reports that visits to restaurants declined by -1 percent in the quarter ending June 2010, which was an improvement from the -3 percent loss in spring 2009. Also, customer spending reminded in a downfall after four consecutive quarters of declines at commercial foodservices. A year ago, customer spending was up by 1 percent.
According to NPD’s CREST, which tracks consumer usage of commercial and non-commercial foodservice outlets, customer traffic was the lowest at full-service restaurants. In addition, casual dining restaurants visits were down by 2 percent and midscale restaurant traffic was down 3 percent. However, QSR visits remained stable in the second calendar quarter following five quarters of year-over-year declines.
Visit losses at non-commercial foodservice outlets also eased slightly in the second quarter, though traffic is still -6 percent below year-ago levels for the same quarter ending June 2010, according to NPD’s CREST. These outlets include secondary schools, colleges and universities, hospitals, lodging, recreation, senior care, military, and vending segments.
Sectors most affected by the economy and high unemployment, such as business and industry, vending, and recreation, posted the steepest declines.
On a positive note, breakfast visits experienced a 1 percent growth for all restaurants. QSRs experienced a 2 percent growth in breakfast visits, reflecting marketing strategies worked for those adding new breakfast items, such as Burger King and Subway.
Lunch and dinner visits also experienced a 2 percent drop for the spring quarter across all restaurant segments.
“Although the traffic declines moderated this past spring, restaurant operators continued to battle for market share,” said Bonnie Riggs, NPD’s restaurant industry analyst. “Throughout the recession, selected chains have been successful at increasing traffic by aggressively marketing new offers while also providing some low-priced options. One area that showed growth this past quarter came from the value menu, generally a very low price point option for consumers."
NPD predicts foodservice traffic will stabilize in the third quarter and begin to recover in the fourth quarter.