Stalled restaurant growth foreseen in 2017

by Monica Watrous
Share This:
Search for similar articles by keyword: [Food Service]

Empty restaurant
Restaurant operators may struggle to fill seats in the year ahead.
 

 

CHICAGO — Much like in 2016, customer visits to U.S. restaurants in 2017 are expected to remain stalled, according to The NPD Group, which said the total U.S. food service market will see little to no traffic growth in the year ahead. Quick-service restaurants, however, will see a 1% increase in visits, an improvement over flat growth achieved in 2016. This modest gain will offset the estimated 2% decline for full-service restaurants, resulting in no-growth traffic for the industry overall, The NPD Group said.

“Restaurant operators are in a position to alter the current forecast, but will need to differentiate themselves from the competition,” said Bonnie Riggs, The NPD Group’s restaurant industry analyst. “In the year ahead, it will be critical for them to stay relevant in consumers’ minds, focusing on innovative products, unique promotions, competitive pricing, stating the benefits of eating at restaurants vs. home, and delivering an enjoyable experience.”

Other restaurant trends in 2017, according to The NPD Group, include:

•Accelerated menu innovation, driven by experience-seeking millennials and Gen Zs

•An increase in digital menu options enabling consumers to customize orders

•Exponential growth of mobile ordering

•Continued growth of third-party delivery services, such as Grubhub, Amazon and DoorDash

•A rise in restaurant loyalty programs with an emphasis on attracting customers who visit restaurants less frequently

Also of note in the New Year is a continued decline in commodity costs, which is expected to help restaurant operators offset higher labor and insurance expenses, but may create a more challenging environment for operators to capture a greater share of the consumer’s wallet, as the gap widens between away-from-home and at-home food costs, The NPD Group said. 
Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Baking Business News do not reflect those of Baking Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.