NPD’s Consumer Reports on Eating Share Trends (CREST), which tracks consumer usage of commercial foodservice, reports foodservice traffic advanced +0.2 percent over a year ago for year ending November 2008, and consumer spending grew by two percent.
“Despite this past year’s extremely weak economic conditions, the restaurant industry as a whole managed to keep its head above water for most of the year,” says Harry Balzer, chief industry analyst and vice president and author of Eating Patterns in America. “Strong promotional activity on the part of chains, and growth in breakfast and lunch visits to quick service restaurants, contributed to the slight gains the industry experienced this past year.”
According to NPD, promotion-related visits supported all commercial foodservice gains, as deal visits increased six percent and non-deal visits slipped by one percent. For the annual period ending November 2008, 23 percent of all traffic involved some type of consumer-recognized deal. Over 90 percent of the increase in deal visits came from quick-service restaurants.
While quick-serve traffic growth slowed in 2008, the segment fared better than full-service restaurants. The modest growth at quick-serves offset losses at midscale restaurants. Deal-related traffic kept quick-serves in a positive position. Casual dining traffic was stable for the year; however, trends weakened n the latter half of the year with a two percent decline in traffic for the fall quarter.
As consumers took advantage of discounts at lunch, lunch traffic increased after realizing no growth in 2007. However, visits to restaurants for supper continued to trend down. Morning meal and snack-related occasions slowed over the previous years’ growth, but did experience positive growth in 2008.
“I don’t believe consumers, no matter the state of the economy, will abandon restaurants entirely, they will just use them differently – more cost-consciously,” says Balzer, who has been observing how American eat for 30 years. “There will be no recession in eating; there will just be winners and losers. The restaurants that deliver value and make it easy to get food cheaper, in new and compelling ways, will win.”