Industry News | May 6, 2009

Quick-Serve Visits Decline but Summer Looks Bright

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The quick-serve industry experienced its first traffic decline in six years this winter, falling 1 percent from the same quarter a year ago but faring better than the industry as a whole which saw a 1.5 percent decline in traffic.

According to the most recent NPD Group findings, rising unemployment, low consumer confidence, and severe weather conditions kept consumers from visiting restaurants this past winter.

“This number isn’t as negative as it looks because weather really does make a difference in how often consumers visit restaurants,” says Bonnie Riggs, restaurant industry analyst for NPD.

Despite clocking 86 million fewer visits than the year before, the quick-serve industry still came out better than other segments. Full-service restaurants absorbed the steepest loss, and the rate of decline at casual dining accelerated. The good news is spending at commercial foodservice establishments still rose by a half a percent, and the average check size rose 2 percent over last year’s levels.

“There’s a lot of pent up demand and I think we’re going to start seeing business pick up in the summer,” Riggs says. “We’re already seeing business pick up on the weekend.”

While cutting back on weekday visits, consumers ate out more on the weekends, reversing a trend from previous quarters, the report found. As gas prices rose in summer 2008, consumers pulled back on their restaurant visits over the weekends. This winter, however, as gas prices eased, customers began coming slowly back to restaurants on the weekends.

quick-serve weekend traffic For the quick-service industry specifically, weekday traffic was down 2 percent but weekend traffic increased 1 percent. That’s a steady increase from the 1 percent traffic decrease last summer and the zero growth in fall 2008.

According to Riggs recent unemployment reports, which were not as severe as expected, and a strengthening stock market are improving consumer confidence, making them more likely to visit restaurants this quarter.

“We have a tendency to hear all the bad stuff, but maybe it’s not quite as bleak as we thought it was,” Riggs says.

--Blair Chancey

graph source: NPD Group

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