Read More About
Total restaurant industry results for the quarter ending June 2016 looks to be a carbon copy of Quarter 1 results. Total foodservice industry traffic was flat in the first quarter and remains flat in the second quarter, reports The NPD Group, a leading global information company. Quick service restaurant (QSR) visits, which make up 80 percent of total industry traffic, were also flat in the second quarter after being up 1 percent in the first quarter, according to NPD Group’s ongoing foodservice market research.
“Contributing to the stalled visit growth are consumers’ uncertainties about current and future economic conditions,” says Bonnie Riggs, NPD Group’s restaurant industry analyst. “These uncertainties have put a damper on overall consumer spending. Compounding the situation for the restaurant industry is the decline in food at home inflation while at the same time restaurant operators have been increasing menu prices.”
Even the fast casual QSR category, which experienced strong traffic growth for the last several years, saw visit growth slow in the last two quarters. Fast-casual traffic was flat in the quarter ending June 2016 compared to same quarter year ago with a large share of the visit losses attributable to Chipotle and its food safety issues. With Chipotle taken out of the equation, fast casual visits were up 2 percent in the second quarter, which is considerably less than the 11 percent growth the category had in the same quarter last year. The ongoing visit losses in casual dining and midscale/family dining full service segments for the last several years continued in the second quarter.
Lunch was the key contributor to overall traffic declines. Lunch visits, which represent 33 percent of all daypart visits, declined by 4 percent in the second quarter of this year compared to same period last year. Dinner represents 30 percent of daypart visits and declined by 1 percent, which is an improvement over the 3 percent decline in the first quarter of this year. Morning meal traffic, which represents 22 percent of daypart visits and has had a long run of traffic growth, increased by 1 percent.
“The good news in all of this is that consumers made 61.3 billion restaurant visits this past year,” Riggs adds. “They are not giving up dining out at restaurants and other foodservice outlets. It’s true that in this flat market it’s a battle for visit share but there are restaurants that are winning. The winning operators focus on their customers’ needs and deliver on them.”