||Consumers Returning to Restaurants for Dinner Daypart
Consumers are slowly returning to restaurants for dinner after more than three years of declining guest visits for an evening meal, according to new findings from market research firm The NPD Group.
Since the recession's beginning in 2007, dinner traffic had been falling, especially at casual-dining restaurants. But NPD said last week that total visits have turned positive in the past three quarters. According to NPD's CREST service, which tracks consumer use of all foodservice outlets, dinner visits increased 2 percent in the first three months of 2011, following traffic gains of 2 percent and 1 percent in the third and fourth quarters of 2010, respectively.
"The improvement may reflect some easing in unemployment, a modest improvement in consumer confidence, as well as a release of pent-up demand during the periods reported," said Bonnie Riggs, NPD restaurant industry analyst. "I also believe that rising food costs in-home have narrowed the gap between the price of food at home and a restaurant meal."
Recovery at quick-service restaurants, which account for 77 percent of total industry traffic, drove the growth of dinner visits, NPD said. Traffic at midscale and casual-dining restaurants remained weak. In the first three months of 2011, dinner visits rose 1 percent at quick-service brands but fell 2 percent at midscale and casual-dining restaurants. Dinner traffic rose 5 percent at fine-dining restaurants, but upscale locations account for just 1 percent of all restaurant visits, NPD noted.
Over the past several years, restaurant chains have turned to aggressive promotions to maintain dinner traffic, particularly in casual dining, where the bar-and-grill brands Applebee's and Chili's ran dueling $20 prix-fixe deals. Red Lobster's $15 Seafood Feast limited time offer -- with soup, salad, dessert, an entrée and unlimited biscuits -- was credited with increasing traffic and wait times at the casual-dining chain, according to Wells Fargo research.
Quick-service chains have promoted premium products for consumers trading down from casual and upscale restaurants while running aggressive offers of their own, like 10-piece buckets of chicken for $10 at KFC or a $7.99 carryout special at Domino's Pizza.
"There continues to be areas of weakness in the industry, but the industry did pick up in the last few prior quarters," Riggs said. "It remains to be seen, however, if we'll be able to sustain the improvements given the current economic volatility.
"All the reasons consumers go to restaurants -- convenience, varied selections, someone else doing the cooking -- are still valid and could continue to drive the industry's improvement," she said.
Over the past six months, traffic on the weekends improved across all dayparts and visits from families with young children also rose, NPD found.
(Source: Nation's Restaurant News, 06/27/11)