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Restaurant Traffic Struggling

Published: May 7, 2009
Rising unemployment, low consumer confidence, and severe weather conditions kept consumers from visiting restaurants this past winter, according to The NPD Group, a leading market research company. For the second consecutive quarter, restaurant traffic dipped below year ago levels as mounting job losses hurt lunch weekday visits and supper traffic declines continued.

For the quarter ending February 2009, NPD’s Consumer Reports on Eating Share Trends (CREST®), which tracks consumer usage of commercial foodservice, reports foodservice traffic declined -1.5 percent from the same quarter a year ago, and total spending at commercial foodservice still rose but only by one half of one percent as the average eater check size rose two percent over year ago levels.

"While not yet the worst NPD has seen, we are half-way to it. There are still restaurants attracting more consumers, but more are losing them than gaining,"   says Harry Balzer, chief industry analyst at NPD and author of Eating Patterns in America. "It’s going to take product innovation, a strong value proposition, and creativity to capture share in a market that will not be growing in the near term."    
The quick service restaurant (QSR) segment experienced its first decline this quarter since winter 2003. Customer counts at QSR were down -1 percent. Full service restaurants absorbed the steepest loss, and the rate of decline at casual dining accelerated.  

One bright spot for the restaurant industry this winter was that consumers, while cutting back on weekday visits, ate out more on the weekend, reversing a trend in previous quarters. As gas prices rose in summer 2008, consumers began pulling back on their foodservice visits on the weekend. This winter, as gas prices eased, customers began coming slowly back to restaurants on the weekend.

"Consumers seemed more willing to use foodservice as a special occasion on the weekend,” said Michele Schmal, vice president of foodservice product development at NPD. “Perhaps they are looking for a chance for a little escape via affordable luxuries, amidst the economic doom and gloom."