NPD: On-premises dining outperforming drive-thru

by Keith Nunes
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Consumer interest in an experience is fueling the trend.

CHICAGO — More consumers are entering restaurants and enjoying a meal rather than using the convenience of the drive thru, according to a new report from the NPD Group. Dine-in visits account for approximately $223.4 billion in sales annually vs. off-premises dining, which the market research firm pegged at $200.3 billion.

The incidence of on-premises dining has been on the rise for the past three years while off-premise dining has been flat, according to NPD’s Crest Foodservice report. At the category level, quick-service restaurants, which represent 78% of total industry traffic, increased dine-in visits by 5% last year, the highest gain of all restaurant segments. Casual dining on-premises traffic held steady in the year ended December 2014 against overall visit declines for the segment. Dine-in visits at family dining/mid-scale restaurants declined as did overall visits.

Reasons cited by consumers for the renewed interest in on-premises dining include a need to “get out and meet someone,” “relaxing,” “fun to do,” and “I don’t need to worry about anything.” The reasons are in line with what The NPD Group called the “experiential purchasing” trend — the idea that consumers want to do something, not just buy something — that marketers are seeing across consumer sectors.

As far as reasons for selecting a restaurant, good tasting food is by far and away the cost of entry for restaurant operators looking to drive on-premises visits, followed by convenience and service.

A challenge for anyone participating in the food service sector is that dine-in customers are not necessarily the most loyal group. Forty-two per cent of on-premises diners said they are somewhat loyal to a particular restaurant or chain, 34% said they are loyal, and 24% said they are not loyal at all. The market research firm identified converting guests from somewhat-loyal to loyal is an opportunity for restaurant operators.
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