Restaurant Industry Ends Year With Lackluster Performance

CHICAGO -- After a strong 2012 start, the U.S restaurant industry saw weaker spring and summer quarters compared to the same period last year. The result is a "lackluster, yet stable industry," concluded The NPD Group Inc., a market research firm that studies the foodservice industry.

“While the restaurant industry basically recovered from last year’s traffic declines, a sluggish economy and continuing cost consciousness on the part of consumers kept the industry stable but not growing,” said Bonnie Riggs, NPD’s restaurant industry analyst.

NPD's CREST database tracks the foodservice industry based on consumer reporting of more than 400,000 visits to foodservice outlets a year. The research indicated that during the months of July, August and September, consumers chose more quick-service restaurants (QSRs), a segment that saw a 1-percent gain in traffic with success reported in QSR coffee/doughnut/bagel, fast casual, retail and Mexican chain outlets. QSR hamburger locations, however, reported flat visits compared to the same quarter in 2011.

Meanwhile, full-service restaurants struggled in the summer months with visits to midscale/family dining restaurants down 2 percent. The casual dining segment also experienced a decline of 3 percent.

NPD's report, “A Look at Influencers of Restaurant Visits,” identified price disparity between casual dining and QSR locations, unemployment and young adult cutbacks as contributing factors to the decline in casual dining suppers, "a key daypart for the segment." No restaurant segment saw suppertime growth in the summer quarter, according to NPD’s CREST, and gains in breakfast, lunch and PM snacks were exclusive to QSR consumers. NPD concluded that consumers appear to be more frugal at supper, while spending more at less expensive dayparts.

"The current economic environment and consumer mindset may be longer term than we first thought and the industry will need to adjust accordingly," explained Riggs. "There are still growth opportunities in the industry; it’s a matter of identifying the opportunities and, as always, meeting consumers’ needs and wants."