NPD Group sees most significant drop in restaurants since recession.

Increased competition and a dip in restaurant trips is having an impact on the restaurant industry. NPD Group, a global information company, reported that the total number of U.S. restaurants decreased by 2% from a year ago to 620,807 units, according to a count of U.S. commercial restaurant locations compiled each spring and fall by NPD.

With the decline in restaurant units, restaurant density (units per million population) is at its lowest level in the past ten years, dropping from 1,992 units per million in fall 2007 to 1,924 units per million in fall 2016, based on NPD’s Fall 2016 ReCount, which includes restaurants open as of September 30, 2016.

Independent restaurant units decreased by 4% and density declined from 1,132 units per million a decade ago to 1,002 units per million in fall 2016, reported NPD. On the flip side, chain restaurant unit counts grew by 1% in the fall 2016 increasing to 297,351 units. Density of chain restaurants grew from 860 units per million in fall 2007 to 922 in fall 2016.

The decline in independent restaurant units sourced to both the quick service and full service segments. The higher concentration of independent units, however, is in the full service segment, which includes casual dining, midscale/family dining and fine dining. The fast casual quick service segment, which includes selected chains identified by NPD as “fast casual,” continues to expand, increasing units by 7% to 23,798. Density of fast casual restaurants is 74 units per million in fall 2016, up from 41 units per million in fall 2007.

Total U.S. restaurant visits dipped slightly in the year ending December 2016, according to NPD’s ongoing foodservice market research, CREST. Quick service restaurant traffic, which represents 80% of total industry traffic, was flat last year. Visits to independent restaurants declined by 2% and chain restaurant visits were up 1%.

“This is the most significant drop in total U.S. restaurant counts since the recession,” said Greg Starzynski, director- product management, NPD Foodservice. “If consumers continue to reduce their restaurant visits, we expect the number and density of restaurant units will continue to decline in response to the lower demand.”