U.S. Restaurants See Visit Losses Ease and Spending Increase in Fourth Quarter of 2010

Although visits to U.S. restaurants are still below the level registered six years ago, there were signs of improvement in the second half of 2010, according to The NPD Group, a leading market research company.

NPD's foodservice market research reports restaurant traffic was flat for the quarter ending December 2010, compared to a -3 percent decline for same quarter year ago. Visits to quick service restaurants increased in the second half of 2010.

Another sign that the foodservice industry is improving is that non-deal visits stopped declining, according to NPD's CREST®, which continually tracks consumer usage of commercial and non-commercial foodservice outlets.

Consumer spending at restaurants has also started to come back. Spending rose in the last three quarters of 2010, which yielded an increase in spending for 2010. The gain brings the industry nearly back to the dollar level registered in 2008.

"I believe that the improvements we're experiencing in the industry are a result of pent up demand,"says Bonnie Riggs, restaurant industry analyst at NPD. "Consumers are tired of pinching pennies and Recession-weary and going to a restaurant is an affordable way to get out and have fun."

According to NPD's 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, total non-commercial traffic declines eased in the fourth quarter compared to year-ago. Most notably, after 14 consecutive quarters of traffic losses, Business &Industry traffic increased +2 percent vs. year-ago.

"We are beginning to see many encouraging signs, however, with unemployment still over 9 percent and consumer confidence low, consumers continue to scrutinize every purchase,"says Riggs. "There's no question value and promotion will continue to factor heavily in their restaurant selections. It will take a lot of creativity to drive more traffic in the coming year."