As a whole, the restaurant industry has seen little growth in recent years, but there are sections within the industry that have experienced more promising growth.
Data representing the restaurant industry has revealed that the industry as a whole is experiencing only minimal growth, quarter-after-quarter, year after year. Research from The NPD Group has revealed that restaurant visits will increase only 1% annually, which has been the case for the industry since 2010, and this trend is not expected to change within the next several years.
Though total industry growth is moving at a snail’s pace, there are pockets of stronger growth. Total industry traffic was flat in the first quarter of this year compared to last year, yet the morning meal (breakfast and am snack) continues to fuel the industry’s visit growth. In the first quarter (January, February and March) of this year, total industry morning meal visits increased by 2%, compared to same period last year, and increased by 4% at quick service restaurants (QSRs). Servings of breakfast foods increased by 8%, and breakfast sandwiches and other breakfast items topped the industry list of growing foods.
Restaurant visits on a deal were also an area of growth for the industry with deal traffic up 2% for total industry and up 3% at QSRs. Much of the deal traffic increase was driven by the combo meal “value wars” among the major QSR hamburger chains. Combo meal visits to traditional QSRs increased by 2% in the first quarter of 2016, and helped improve QSR hamburger visits overall. The average deal rate (percent of visits where an item was purchased on a deal) for QSRs is 26%. The average deal rate for the burger chains offering the combo meal value deals is 35%, according to NPD’s recently released report, Value Wars: A New Twist on Combo Meal Deals, which is based on an analysis using NPD’s receipt mining service, Checkout Trackingsm.
While consumers chose QSRs over all other segments to satisfy their away-from-home foodservice needs, of particular note was the flat traffic growth in the fast casual QSR category in the winter quarter. This was a departure from the strong traffic growth fast casual chains had experienced over the last several years. Chipotle’s recent food safety issues contributed to the slowdown in the last two quarters. Taking Chipotle out of the equation finds fast casual visits up 5%.
“There is a confluence of changing demographics, economic pressures and evolving consumer attitudes and behaviors creating shifts in what, where, when and how we eat,” said Bonnie Riggs, NPD restaurant industry analyst. “The key for foodservice manufacturers and operators is to stay connected with their consumers/customers, understand their motivations and needs and how they can offer them a unique value proposition.”