Foodservice Equipment Reports

After Two Years Of Declines, Foodservice Traffic Begins To Pick Up

We’ve said again and again that the recession in foodservice has been unprecedented in our lifetimes. It’s within that context that a milestone was achieved in the fourth quarter 2010: Overall foodservice traffic was flat, according to the NPD Group. It was the first quarter in two years in which traffic had not declined. In the fourth quarter ’09, traffic fell 3%.

The Port Washington, N.Y.-based research group also said spending rose in the quarter, the third consecutive quarter of spending gains. Spending has now nearly pulled even with the dollar level reached in ’08.

“I believe that that the improvements we’re experiencing in the industry are the result of pent-up demand,” said Bonnie Riggs, restaurant industry analyst at NPD. “Consumers are tired of pinching pennies and recession-weary, and going to a restaurant is an affordable way to get out and have fun.” Still, Riggs noted consumers are still very value-conscious, and while occasions involving a promotion are down, she expects operators to continue to compete aggressively for attention.

Quick-service traffic rose 1% in the fourth quarter; it was also up 1% in the third quarter. Quick service accounts for more than three-quarters of all foodservice occasions. Fine dining/upscale hotel has also been positive for two consecutive quarters, after experiencing dramatic declines last year. Visits increased 3% in the fourth quarter compared with a whopping 16% decline in the same quarter ’09.

Noncommercial traffic declines finally began to ease in the fourth quarter, falling only 2%, compared with 6% drop in the third quarter and a 10% fall in the fourth quarter ’09. In a clear sign of the improving employment picture, business and industry traffic rose 2%; it had declined for 14 consecutive quarters.

The other two major segments, midscale and casual dining continued to experience traffic declines. Midscale visits fell 3% and casual dining was off 2%. Information on NPD research products can be found at npd.com.

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