Industry News | April 13, 2010

Analysts Predict Industry Turn Around

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Signals are emerging that the restaurant industry is poised for a turn toward recovery, according to The NPD Group, a market research company that tracks consumer usage of foodservice outlets.

NPD’s SalesTrac Weekly restaurant market research report, which measures same-store sales trends for 47 quick-serve and family-style chains, shows same-store sales increases over a year ago in four of the past six weeks, a trend not seen in 11 months.

Less focused on controlled spending, price, and deals, fewer consumers are saying that they are trading down in restaurant selection based on price, fewer are searching for good deals more often, and fewer are sacrificing a restaurant visit so that they can do other things.

“It’s clear from our research and other indicators that consumers are feeling more positive about the economy,” says Bonnie Riggs, NPD’s restaurant industry analyst.

“Our survey findings, combined with other publicly reported information on restaurants’ improving status, suggest a move toward recovery may be starting soon, if it is not already underway.”

Although there are positive indications the industry is improving, Riggs cautions that the industry isn’t out of the woods yet, with total restaurant industry traffic still down 3 percent for year ending February, a duration of 14 consecutive months of declines.

“Our forecasting model shows that the industry will remain weak for at least another seven months,” Riggs says.

“Additionally, once losses moderate, it will likely take more than a year to recover lost visits; but there are strong indications that the industry is now moving in the right direction.”

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