Consumer Research Firm Sees Better Year for Restaurants

PORT WASHINGTON, N.Y. -- The NPD Group forecasts a 3-percent increase in spending in 2014 as well as traffic growth from convenience stores.

While consumers’ mindset for cautious, controlled spending is expected to remain in place for some time, traffic and dollar growth for the restaurant industry is expected to improve in 2014, according to the consumer research firm.

The overall 3-percent increase in dollar spend in 2014 is an improvement over the 2-percent gain of 2013. In addition, the firm is predicting a 1-percent rise in traffic, coming off an essentially flat year in 2013.

The NPD’s forecasts indicate traffic will build for fast-casual restaurants, submarine shops and gourmet coffee/doughnut outlets. Additionally, convenience stores are likely to experience traffic growth as they take advantage of consumers’ current tendency to “trade-down” from more expensive options. Food retailers offering convenient meal solutions make up another market segment projected to see growth in the year ahead -- taking visits away from traditional restaurants.

The expected rise in beef prices and low chicken prices will be reflected in menu offerings, the firm reported. New and different non-beef pairings of foods will result in overall growth for chicken products and a dampening of beef orders.

The research firm also predicts changes in the composition of the U.S. population will cause shifts in menu offerings. The influence of the growing U.S. Hispanic population is reflected in the increased popularity of fruits, juice drinks and more flavorful spices and seasonings. The growing Asian population carries its influence on menus as well, with noodles, rice, specialty sauces, and other foods and flavors.

Because Boomers and their older counterparts have been less affected by prolonged high unemployment and the recession, these individuals have continued to visit restaurants at an ever-increasing rate. While their food and beverage preferences may differ from those of the younger set, many older consumers are bringing their "younger" preferences with them. Boomers have become less “different” from the overall population than were their predecessors when it comes to food preferences. Their importance to the foodservice industry will continue to grow; the group is too large and important to be overlooked.

Mobile Technology Key to Relationships

Building stronger relationships among a chain’s customers has taken on new meaning with the growing importance of mobile technology, according to NPD. The need today is to communicate with customers at any time, wherever they are. In most cases, this means reaching out to them via their mobile devices. These tools are becoming even more important for consumers, and the expectation is that most of their needs can be met through these devices. Consumers’ use of mobile devices for ordering and paying for meals and reporting on the meal experience will continue to grow as mobile technology becomes even more integrated into everyday life.

Growing Interest in Healthy Offerings

Consumers’ interest in healthy meal options is tied to the health needs of Boomers and older individuals, the growth in ethnic groups accustomed to fresh food preparation, and greater awareness of the need for and benefits of healthy eating among younger generations.

“One place we’re seeing this is in the growing number of consumers who tell us they prefer gluten-free foods, not because of required dietary restrictions, but because of the benefits of overall healthier eating,” NPD stated.

Consumers expect operators to deliver against perceptions of healthier eating with menu emphasis on fresh ingredients and freshly prepared foods.

New Businesses, Concepts Will Emerge

Entirely new concepts are emerging on the landscape. An example is the My Fit Foods chain that offers freshly prepared meals that can be taken home and heated up or eaten on premises. Outlets like Lyfe Kitchen, which address the interest in fresh, healthful food, will increasingly appear on the scene. In addition, operators are making more concerted efforts to provide their food where their customers work, with catering.

"Creative, new, exploratory -- expect to see more attempts to find the new niche, the next 'fast casual,'" NPD concluded.