NPD's CREST, which continually tracks consumer usage of foodservice, reported that total restaurant industry traffic declined by 3.6% in the summer quarter (June, July and August) vs. the summer quarter last year. Total consumer spending at foodservice contracted by 1.6% vs. a year ago due to the weakness in customer [image-nocss] traffic, marking two consecutive quarters of spending decline.
According to CREST, traffic declined across all restaurant segments and dayparts. This summer, visits to quick-service/fast-food restaurants (QSRs) declined by 3%. Casual dining declined 4% and midscale was down 5%. Visits at the supper daypart fell for the seventh consecutive quarter, declining in the summer quarter by 6% vs. a year ago. Lunch visits contracted by 4%, morning meal traffic fell by 2%, and "PM snacks," which showed positive growth (1%) in the spring quarter, declined by 2% 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," said Harry Balzer, chief industry analyst and vice president at NPD. "Food prices at supermarkets are less than a year ago, while restaurant prices are higher than a year ago."
To appeal to the price-conscious consumers, restaurants have been aggressive in offering deals during 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%, NPD reported. Deal-related visits increased by 2%, and non-deal visits fell by 5% in the summer quarter ending August. The increase in dealing this summer traced to coupons, especially Internet coupons, "buy some/get some free," and discounted price. More than half of the increase in dealing came from casual-dining chains.
NPD's CREST OnSite, which tracks usage of foodservice at business and industry, secondary schools, colleges and universities, hospitals, lodging, senior care, military segments, and vending, reported that for the year ending June 2009, non-commercial foodservice traffic experienced declines in sectors most affected by high unemployment, such as business and industry, vending and lodging. Business and industry posted a 12% decline for the year ending June 2009 vs. a year ago. Foodservice traffic increased at colleges and universities (4%), senior care (1%), and military segments (1%). Traffic at secondary schools was down 1% for the year, driven by a reduction in ala cart visits. Greater participation in the national school lunch and breakfast programs offered at secondary schools resulted in an increase in cafeteria meal visits.
In a release of this data, NPD noted that "the weakness foodservice is experiencing is not expected to be short-lived. Foodservice traffic will remain weak throughout the third and fourth quarters of 2009, and we don't expect traffic growth until the second half of 2010."
The NPD Group is a provider of consumer and retail information for a wide range of industries, including automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless.
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