Restaurant traffic growth remains sluggish: Report
Publish Date: July 26, 2014
Americans made roughly 61 billion visits to restaurants during the 12 months ended in May, about the same number as during the comparable period the year before, and some 1.3 billion visits below prerecession traffic levels, according to NPD Group. Even more troubling for restaurant chains, NPD’s long-range forecast sees little traffic growth — less than 1 percent annually — over the next several years.
Visits to midscale and family dining and casual-dining restaurants have been in decline since before the recession, according to Bonnie Riggs, NPD’s chief restaurant analyst. Lunch and dinner times have seen traffic declines over the past several years, Riggs says. And visits by people between the ages of 25 and 49 have dropped by a rate of 44 per person per year, over the past three years. Visits to quick-service burger restaurants are off by about 2 percent for the 12 months ended in May 2014, she says. “There are some fundamental shifts in how consumers, particularly low- and middle-income consumers, address their discretionary spending,” Riggs said in a press release. “Similar to the stalled growth other retail sectors are experiencing, restaurants are being negatively impacted by a large segment of the population who are watching their discretionary spending closely. Going to a restaurant is a nice-to-have and not a need-to-have.”
Some restaurant sectors are doing well, however; restaurants that are less expensive than the competition or that offer more perceived value for the money have been gaining market share, Riggs says. Meanwhile, breakfast visits — the least expensive restaurant meal — have been up for the past three years, according to NPD. Traffic based on a deal or discount was up 5 percent in the 12 months ended in May, while nondeal traffic was off 2 percent. “The fast-casual quick-service category, which consumers perceive to have enhanced service and higher-quality food than traditional quick-service restaurants, continues to grow visits,” Riggs said. “The restaurant industry is not going to see the strong growth it did prior to the recession in the near future. Consumer attitudes and behaviors have changed and may have changed for good. Margins are being squeezed, and it’s a battle for share, but the fact remains that U.S. consumers still make billions of visits to restaurants each year. It’s a matter of staying in touch with the reasons why they visit and providing them the experience they want when they do eat out.”