Customer visits to U.S. restaurants and foodservice outlets remained negative in the quarter ending June 2017, resulting in six consecutive quarters of weak traffic performance, according to The NPD Group, a leading global information company. The U.S. foodservice industry has not experienced six quarters in a row of no traffic growth since the recession of 2008-09.
The average check at foodservice outlets rose by 2.6% — the largest increase in several years — reflecting higher menu prices.
“No doubt, the rising cost of a restaurant meal is weighing heavily on industry traffic performance,” said Bonnie Riggs, NPD Group restaurant industry analyst. “The vast majority of consumers give restaurants fairly low ratings on affordability compared to other customer satisfaction attributes.”
The slowdown in restaurant and foodservice visits was most prevalent at midscale/family dining and casual dining concepts. Midscale establishments registered a 4% decline in traffic in the quarter compared to same the quarter a year ago. Casual dining visits dropped 3% in the quarter, according to NPD’s CREST, which tracks daily all aspects of how consumers use restaurants.
Visits also softened for quick-service restaurants (QSRs), which represent the lion’s share (83%) of industry traffic and have been the only driver of industry traffic growth for several years. QSR customer visits were flat in the quarter compared to last year, but a steeper decline was offset by traffic growth at QSR hamburger and fast-casual restaurants. The QSR hamburger category realized nearly 13 million more visits in the quarter than last year, and fast-casual grew traffic by 77 million incremental visits.
In addition to QSR hamburger and fast-casual restaurants, other industry bright spots in the quarter included the continued growth of morning meal visits, which were up 1% in the quarter versus a year ago, and foodservice delivery, which was up 2%. The QSR segment was primarily responsible for the uptick in morning meal visits. Delivery growth was entirely derived from four restaurant categories: sandwich QSRs, burger QSRs, midscale and Asian restaurants.
“Although there were a few performance bright spots this quarter, these visit occasions are not large enough to move the industry in a positive direction,” Riggs said. “Operators will need to be critical in increasing prices and make sure that, when they do raise prices, the quality of the food and experience is commensurate with their customers' cost.”