The restaurant industry is an economic bellwether, and the read for the first quarter of 2017 is steady as she goes, according to a report by The NPD Group, a leading global information company that continually tracks the foodservice industry.
According to the report, consumer spending grew by 1.3%, and visits to restaurants and foodservice outlets held steady. On the supply chain side, operators of eating and drinking establishments and retail foodservice outlets increased their dollar spend with the major U.S. broadline distributors by 1.7% and increased their cases ordered by 0.5%.
The foodservice industry, like other sectors, has areas of growth and weakness. Areas offering the most convenience to customers, like delivery and drive-thru, grew in the first quarter of the calendar year by 2% and 3%, respectively, according to NPD’s CREST foodservice market research, which tracks daily how U.S. consumers use restaurants and foodservice outlets.
The morning meal, the most affordable and convenient daypart, grew by 1%, while restaurant visits on a deal or discount increased by 2%. Visits to fast-casual restaurants, included under the quick-service restaurant segment, grew by 3% mainly due to unit expansion.
SupplyTrack, which tracks monthly sales of every product shipped from a critical mass of leading broadline distributors to each of their foodservice operators, reported that eating and drinking establishment micro-chains -- chains with 3-19 units -- fared best among operator system size by increasing their spending with broadline distributors by 4.6% and their cases ordered by 3.0%.
According to NPD, many of the weak areas of the industry have been declining since the recession, which is the case with casual dining and mid-scale/family dining traffic. In fact, visits fell 4% to casual dining restaurants and fell 3% to mid-scale/family dining.
Dinner traffic has also been a challenge for several years now, NPD noted, with visits declining 2% in the first quarter. In addition, lunch traffic was flat in the reporting period but declined in previous quarters, which is a reflection of more people working at home, shopping online and other changing behaviors, the group noted.
“The foodservice industry is a vibrant and very much-needed sector of the U.S. economy. The pockets of growth and weak areas are a reflection of what today’s foodservice consumers need and want and provide directional guidance to restaurant operators and foodservice distributors and manufacturers,” said Warren Solochek, president of NPD’s foodservice practice. “Although consumers’ attitudes and behaviors are shifting, the reasons that they choose foodservice remain the same: convenience, quality food, value and the experience.”