NPD study shows slower restaurant traffic

by FoodBusinessNews.net Staff
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CHICAGO — Traffic at restaurants has declined for the second consecutive quarter, according to a new report from The NPD Group. The market research firm cited "rising unemployment, low consumer confidence and severe weather conditions" as factors driving a 1.5% decline in food service traffic as part of its "Consumer Reports on Eating Share Trends" study for the quarter ended February 2009.

Despite the decline, NPD said total spending at commercial food service locations rose by one half of 1% as the average guest check size rose 2% over year-ago levels.

"While not yet the worst NPD has seen, we are half-way to it," said Harry Balzer, chief industry analyst at NPD and author of "Eating Patterns in America." "There are still restaurants attracting more consumers, but more are losing them than gaining. 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."

Breaking down the food service traffic, full-service restaurants sustained the steepest loss, while the rate of decline at casual dining locations accelerated. Quick-service restaurant traffic fell 1%, the segment’s first quarterly decline since the winter of 2003.

One bright spot identified by NPD was a tendency by consumers to eat out more on the weekend, reversing a trend in previous quarters. The market research firm said the reversal reflected lower gas prices during the winter that put more consumers back out on the road.

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

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