Consumer traffic to restaurants in the United States has flattened, with few signs of an imminent rebound, according to new data from The NPD Group.
The Port Washington, N.Y.-based market research firm found that American consumers made about 61 billion visits to restaurants during the 12 months ended in May 2014, roughly the same number of visits recorded in the 12-month period a year earlier. That amount of traffic is nearly 1.3 billion annual dining-out occasions below pre-recession levels, NPD found.
The firm’s long-range traffic forecast shows annual growth of less than 1 percent expected for the next several years.
“There are some fundamental shifts in how consumers, particularly low and middle-income consumers, address their discretionary spending,” said Bonnie Riggs, restaurant industry analyst at NPD, in a statement. “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.”
In the latest period NPD tracked, midscale and family-dining restaurants once again recorded the largest average decline in traffic, with a 3-percent decrease for the 12 months ended in May. Casual-dining visits decreased 2 percent.
Traffic during the period was flat at quick-service restaurants, which in NPD’s research include fast-casual brands, as well as more typical fast-food concepts. Visits to fast-casual brands increased steadily, NPD reported, which helped offset weaker traffic at quick-service restaurants, such as hamburger restaurants, which recorded a 2-percent decrease as a segment for the 12 months ended in May.
The breakfast and evening snack dayparts — which account for 21 percent and 14 percent of all restaurant visits, respectively — were two bright spots in industry traffic trends, each growing their visits by 2 percent for the 12 months ended in May.
Yet the two biggest industry dayparts lost traffic during the period. Lunch, which accounts for 34 percent of all visits, recorded a 1-percent decline in traffic. Dinner, which makes up 31 percent of all visits, had a 2-percent drop in traffic.
One other data point NPD noted as important was the increase in deal-related traffic, which rose 5 percent in the 12 months ended in May. By contrast, restaurant visits without the redemption of a deal or a discount declined 2 percent during the period, showing that a cautious post-recession consumer would likely be the norm for the foreseeable future, NPD found.
“The restaurant industry is not going to see the strong growth it did prior to the recession in the near future,” Riggs said. “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.”
Contact Mark Brandau at firstname.lastname@example.org.
Follow him on Twitter: @Mark_from_NRN