Restaurant Visits Decline in Spring for Eighth Consecutive Quarter, But Rate of Decline Slows Over Year Ago

Although the traffic declines moderated this past spring, restaurant operators continued to battle for market share

(SALEM, Ore.) - The effects of a lingering recession continued to keep visits to U.S. restaurants down for the eighth consecutive quarter this past spring, but the rate of decline eased over the same quarter a year ago, according to The NPD Group, a leading market research company. NPD’s foodservice market research reports that visits to restaurants declined by -1 percent in the quarter ending June 2010, an improvement over the -3 percent traffic loss in spring 2009. After four consecutive quarters of declines consumer spending at commercial foodservice this spring edged above a year ago spending, with a +1 percent lift.

According to NPD's CREST®, which continually tracks consumer usage of commercial and non-commercial foodservice outlets, traffic was weakest at full service restaurants, visits to casual dining restaurants were down -2 percent and midscale restaurant traffic was down -3 percent decline. Traffic to quick service restaurants (QSR) was stable in the second calendar quarter following five quarters of year-over-year declines.

Visit losses at non-commercial foodservice outlets also eased slightly in the second quarter, though traffic is still -6 percent below year ago levels for the same quarter ending June 2010, according to NPD's CREST OnSite®, which tracks usage of foodservice at business and industry, secondary schools, colleges and universities, hospitals, lodging, recreation, senior care, military, and vending segments.

Sectors most affected by the economy and high unemployment, such as business and industry, vending, and recreation, posted the steepest declines.

Morning meal was the one area of traffic growth this spring with visits up +1 percent at total restaurants and +2 percent at QSR over a year ago, reflecting targeted marketing support by a few major QSR chains. Supper continued to post weak traffic trends, down -2 percent for the spring quarter across all restaurant segments. Lunch visits declined by -2 percent; with lunch visits at full service restaurants especially weak.

"Although the traffic declines moderated this past spring, restaurant operators continued to battle for market share," says Bonnie Riggs, NPD's restaurant industry analyst. "Throughout the recession, selected chains have been successful at increasing traffic by aggressively marketing new offers while also providing some low-priced options. One area that showed growth this past quarter came from the value menu, generally a very low price point option for consumers."

NPD's forecast for the foodservice industry this year suggests traffic will stabilize in the third quarter and begin to recover in the fourth quarter.
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