Summer is historically a peak season for the foodservice industry, but this past summer the industry realized its fourth consecutive quarter of traffic declines versus the same quarter a year ago, according to market research firm The NPD Group.
 
NPD's CREST, which continually tracks consumer usage of foodservice, reports that total restaurant industry traffic declined by -3.6 percent in the summer quarter, consisting of June, July, and August, versus the summer quarter last year. Total consumer spending at foodservice contracted by -1.6 percent versus a year ago due to the weakness in customer traffic, marking two consecutive quarters of spending decline.
 
According to CREST, traffic declined across all restaurant segments and dayparts. The breakdown is as follows:
  • Quick service/fast food restaurants (QSR) declined by -3 percent.
  • Casual dining declined -4 percent and midscale was down -5 percent.
Visits at the supper daypart fell for the seventh consecutive quarter declining in the summer quarter by -6 percent versus a year ago. Lunch visits contracted by -4 percent, morning meal traffic fell by -2 percent, and p.m. snack, which showed positive growth (+1 percent) in the spring quarter, declined by -2 percent this past summer.

"There are a variety of factors contributing to the declines in restaurant visits and spending, including high unemployment, and another is the difference between food prices at home and food prices away-from-home," Harry Balzer, chief industry analyst and vice president at NPD, said in a news release. "Food prices at supermarkets are less than a year ago, while restaurant prices are higher than a year ago."

To appeal to price-conscious consumers, restaurants have been aggressive in offering deals over the past year. Deal-related visits to restaurants remained the only area of increase in the summer quarter, despite a tough year-ago comparison of 9 percent, NPD reports. Deal-related visits increased by 2 percent and non-deal visits fell -5 percent in the summer quarter ending in August. The increase in dealing this summer was traced to coupons, especially Internet coupons, "buy some/get some free," and discounted pricing. More than half of the increase in dealing came from casual dining chains.

NPD said it expects foodservice traffic growth to remain weak until the second half of 2010.

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