Full Service Restaurants Continue Four-Year Streak of Visit Losses

CHICAGO -- Full service restaurant traffic dropped during the April, May and June 2012 quarter, continuing a four-year streak of losses, according to foodservice market research from The NPD Group. However, quick service restaurant (QSR) traffic grew more than one percent during the same time period, offsetting full service losses enough to keep total industry traffic stable.

Foodservice eater checks increased by an average of 2 percent during the quarter despite slowed traffic growth, reported NPD's CREST, which tracks the foodservice industry based on consumer reporting of over 400,000 visits to foodservice outlets each year. The check increase for the past two quarters continued to lag behind the 2.9-percent inflation for food away from home, stated NPD, but remained the strongest rate of increase in more than two years. Some of the check increase is due to price increases, but foodservice visits on a deal were soft and full-priced visits posted growth, which would also drive checks up.

While consumers spent more during Q2, price points affected their choice of restaurants. The $5.18 average check price at a QSR is far below the $9.66 average check at midscale restaurants and the $13.31 average check price at casual dining outlets, possibly lending consumers more room to experiment with QSR offerings. Value, food quality and service are key influences on consumer behavior along with price and affordability, according to NPD's recently released report, "Casual Dining Restaurants, Stop the Leaky Bucket." The report examines customer motivations for selecting restaurants, cross purchasing and customer satisfaction to help full service restaurants increase visits.

Casual dining traffic dropped two percent during Q2 compared to one year ago, and midscale traffic declined by 3 percent. Traffic to non-commercial outlets continued to contract, showing a 2-percent decline driven by losses in foodservice visits to business and industry and to the education sector. QSR locations showed increased visits at all main meals, while midscale restaurants absorbed traffic losses throughout the day, reported NPD. Casual dining supper was weak while lunch remained stable.

"In our forecast for the balance of 2012 and 2013, the foodservice industry's growth is likely to depend on check increases with traffic remaining relatively flat," stated Bonnie Riggs, NPD's restaurant industry analyst. "An improvement in the economy, especially reducing unemployment, would certainly help the industry improve."