U.S. Restaurant Traffic Will End the Year Flat

CHICAGO -- The U.S. restaurant industry entered 2011 hopeful after ending 2010 with two consecutive quarters of 1-percent traffic increases, but the continuing economic saga of high unemployment and low consumer confidence kept visits to restaurants flat in the first three quarters of the year, according to market research company, The NPD Group.

Restaurant traffic was just above the line at plus 0.2 percent in the quarter ending March and just below the line at minus 0.4 percent for both the second and third quarters, according to NPD's CREST service, which continually tracks consumer use of U.S. restaurants.

Quick-service restaurants (QSRs), which represent 78 percent of industry visits, held up the industry with a 1-percent gain in the first quarter ending March, and flat visits in both the second and third quarters. Visits to casual-dining restaurants, which represent 11 percent of industry traffic, declined 2 percent in both the first and second quarters and by 1 percent in the third quarter. Midscale/family-style restaurants, which represent 10 percent of industry visits, saw traffic decline by 2 percent in Q1 and 4 percent in the quarter ending September.

"Consumers held tight to their foodservice dollars this year; even the deals that helped drive traffic over the past few years weren't as effective this year," said Bonnie Riggs, NPD restaurant industry analyst. "However, it is evident that the new product offerings, innovation and marketing support most evident in the fast-casual segment, fast-food hamburger, coffee/doughnut/bagel categories and convenience store foodservice were successful in [giving] consumers a reason to visit more."

Although consumer traffic to restaurants was soft in the first three quarters, consumer spending continued to increase modestly due to check growth. Industry spending was up 1.3 percent in the quarter ending September, 2 percent in the quarter ending July and 1 percent in the quarter ending March. The average per-person check rose 1 percent in the first quarter and 2 percent in each of the last two quarters, according to NPD's research.

Its restaurant industry forecast, which uses a confluence of its CREST data and economic indicators, shows that industry visits will be flat for the remainder of 2011. Next year will begin with visits flat, but 2012 will finish with restaurant traffic up 1 percent.

"Even with traffic stagnant for most of this year, there were still 61 billion visits made to U.S. restaurants for the year ending September," Riggs noted. "Next year, the outlook is brighter. The fact is the industry is and will remain an important contributor to the U.S. economy."