Food service traffic continues to decline

by Keith Nunes
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CHICAGO – This past summer the food service industry experienced its fourth consecutive quarter of traffic declines versus the same quarter a year ago, according to the NPD Group. The research firm’s CREST report, which tracks consumer use of food service, reported that total restaurant industry traffic declined by 3.6% in the summer quarter, which included the months of June, July and August, versus the summer quarter last year. Total consumer spending at food service contracted by 1.6% compared to a year ago due to the weakness in customer traffic, marking two consecutive quarters of spending decline.

Traffic declined across all restaurant segments and day-parts, according to the CREST tracking data. This summer visits to quick service/fast-food restaurants declined by 3%. Casual dining declined 4% and mid-scale was down 5%. Visits at the supper day-part fell for the seventh consecutive quarter, declining in the summer quarter by 6% compared to a year ago. Lunch visits contracted by 4%, morning meal traffic fell by 2%, and afternoon snack, which showed positive growth (1%) in the spring quarter, declined by 2% this past summer.

"There are a variety of factors contributing to the declines in restaurant visits and spending, including high unemployment, and another is the difference between food prices at home and food prices away-from-home," said Harry Balzer, chief industry analyst and vice-president at NPD. "Food prices at supermarkets are less than a year ago, while restaurant prices are higher than a year ago."

To appeal to the price-conscious consumers, restaurants aggressively offered deals compared to the past year, according to the NPD Group. Deal-related visits to restaurants remained the only area of increase in the summer quarter, despite a tough year-ago comparison of 9%. Deal-related visits increased by 2% and non-deal visits fell by 5% in the summer quarter ending in August.

The increase in dealing this summer was traced to coupons, especially Internet coupons, such as "buy some/get some free," and discounted price. Over half of the increase in dealing came from casual dining chains.

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