“As goes the U.S. quick service restaurant (QSR) segment, so goes the total foodservice industry,” say analysts with The NPD Group (NPDG). They explain QSRs, which represent 80% of total commercial foodservice visits, realized no traffic growth in 2016, while total foodservice traffic dipped slightly.
Visits to full service restaurants, which combined represent 20% of total industry traffic, declined last year, too, according to NPDG’s daily tracking of consumers’ use of restaurants and other foodservice outlets.
The 2% decline in lunch visits—the primary traffic period—at QSRs and all other food service outlets was a key contributor to the slump in traffic, according to NPDG.
The latest National Restaurant Performance Index (RPI) maintained by the National Restaurant Association (NRA) continues to point to lingering headwinds as well.
Due mainly to weaker results among current situation indicators, the RPI in January was 0.4% less than December at 100.1.
For perspective, RPI index values above 100 indicate a period of expansion, while values below 100 indicate a period of contraction, relative to key industry indicators.
Restaurant operators also reported a pullback in capital spending activity in recent months, according to NRA.
“The dynamics that have driven the foodservice industry for all these many decades are changing and changing quickly,” says Bonnie Riggs, NPDG restaurant industry analyst. “As I’ve said many times before, there will always be a need for foodservice but there is a shift in consumer attitudes and behavior and the landscape is different. Operators and manufacturers need to heed the changing dynamics and adjust their strategies accordingly.”
The total number of U.S. restaurants decreased by 2% last year to 620,807 units, according to a count of U.S. commercial restaurant locations compiled each spring and fall by NPDG. Independent restaurants declined by 4%, while chain restaurant counts increased by 1% last fall.
With the decline in restaurants, NPDG analysts say restaurant density (units per million population) is at its lowest level in the past 10 years.
“This is the most significant drop in total U.S. restaurant counts since the recession,” says Greg Starzynski, director-product management, NPDG Foodservice. “If consumers continue to reduce their restaurant visits, we expect the number and density of restaurant units will continue to decline in response to the lower demand.”
Though U.S. foodservice traffic isn’t growing, there were still close to 62 billion visits made to restaurants and other foodservice outlets last year, say the folks at NPDG. QSR consumer spending increased by 3% and by 2% for the total industry.
All spending gains were driven by an increase in average eater check size. Other industry bright spots last year were the continued strength of morning and afternoon snack, drive-thru visits, combo meal deals, and an increase in breakfast food servings.