Restaurant industry results for the second quarter of 2016 have revealed only minimal growth in the industry.
A new report from The NPD Group has revealed that the total restaurant industry results for the quarter ending June 2016 are uncannily similar to the results of the year’s first quarter.
Just as in the first quarter of 2016, total foodservice industry traffic remained flat in the in the second quarter. Additionally, quick service restaurant (QSR) visits, which make up 80% of total industry traffic, were also flat in the second quarter after being up 1% in the first quarter, according to NPD Group’s ongoing foodservice market research.
“Contributing to the stalled visit growth are consumers’ uncertainties about current and future economic conditions,” said Bonnie Riggs, NPD Group’s restaurant industry analyst. “These uncertainties have put a damper on overall consumer spending. Compounding the situation for the restaurant industry is the decline in food at home inflation while at the same time restaurant operators have been increasing menu prices.”
Even the fast casual QSR category, which experienced strong traffic growth for the last several years, saw visit growth slow in the last two quarters. Fast casual traffic was flat in the quarter ending June 2016 compared to same quarter year ago with a large share of the visit losses attributable to Chipotle and its food safety issues. With Chipotle taken out of the equation, fast casual visits were up 2% in the second quarter and down 3% with Chipotle visits included, which is considerably less than the 11% growth the category had in the same quarter last year. The ongoing visit losses in casual dining and midscale/family dining full service segments for the last several years continued in the second quarter.
Lunch was the key contributor to overall traffic declines. Lunch visits, which represent 33% of all daypart visits, declined by 4% in the second quarter of this year compared to same period last year. Dinner represents 30% of daypart visits and declined by 1%, which is an improvement over the 3% decline in the first quarter of this year. Morning meal traffic, which represents 22% of daypart visits and has had a long run of traffic growth, increased by 1%.
“The good news in all of this is that consumers made 61.3 billion restaurant visits this past year,” said Riggs. “They are not giving up dining out at restaurants and other foodservice outlets. It’s true that in this flat market it’s a battle for visit share but there are restaurants that are winning. The winning operators focus on their customers’ needs and deliver on them.”
