NPD: US Restaurant Traffic Stalls in Spring After Three Quarters of Gain

Just as the U.S. economy stalled in the second quarter of the year, so did restaurant industry traffic, according to The NPD Group, a leading market research company. NPD's foodservice market research shows that visits to U.S. restaurants slipped by 0.4 percent in the second quarter (April, May, June) compared to same time year ago bringing the industry recovery that began in the third quarter of 2010 to a halt. Consumers spent 1.5 percent more at restaurants in spring 2011 than they did in spring 2010. Unlike the three prior quarters, the increase traced solely to higher checks, as traffic contracted slightly.
 

"The consumer demand in the prior three quarters wasn't strong enough to overcome another bump in unemployment, rising gas and commodity prices, and low consumer confidence,"says Bonnie Riggs, restaurant industry analyst, The NPD Group. "The confidence they had in the latter part of last year and the beginning of this year was eroded by bad economic news."

According to NPD's CREST®,which continually tracks consumer usage of commercial and non-commercial foodservice outlets, visits to quick service restaurants were flat in the spring compared to spring 2010. Midscale traffic declined by 4 percent and casual dining traffic declined by 2 percent compared to same time year ago. Fine dining, which had steep declines in 2009 and the first half of 2010, showed some growth in each of the past four quarters.

CREST OnSite®, which tracks usage of foodservice at business and industry, secondary schools, colleges and universities, hospitals, lodging, recreation, senior care, military and vending segments, shows that total non-commercial traffic is down 2 percent versus the same quarter in 2010, however, the rate of decline eased from steeper losses during the recession. Weakness remained prevalent in recreation, education and business and industry sectors. Lodging and hospital foodservice visits were up in the spring compared to last spring.

NPD forecasts that the restaurant industry will close 2011 with a one percent gain in traffic, on par with 2009, but well below the peak years of 2007 and 2008.