Restaurant Traffic Was Flat In Second Quarter, Says NPD

We’ve been waiting for this one. The NPD Group reported that data from its ongoing CREST consumer research, the broadest industry measure of consumer foodservice activity, show traffic at U.S. restaurants in the second quarter 2016 was flat versus the same quarter last year. It was the second consecutive quarter of flat overall traffic. Visits to full-service restaurants, which account for 20% of U.S. restaurant traffic, fell again, while limited service, which generates 80% of traffic, saw no growth in visits for the first quarter since 1Q/14.

The NPD second quarter data gives lie to the widely bruited worries of some observers that we are entering a “restaurant recession.” Narrower gauges of restaurant activity, which focus solely on larger chains, have shown steadily declining traffic and same-store sales since February. The Miller Pulse monthly survey, for example, has both measures in negative territory in July. The current customer traffic and same-store sales components of NRA Restaurant Performance Index, have been swinging wildly in recent months.

But the NPD CREST data, based on consumer panels and thus measuring visits to all sorts of restaurants and other foodservice outlets, is by far the broadest read. And flat is flat, not negative. NPD’s Restaurant Industry Analyst Bonnie Riggs attributed the stalled traffic growth to “consumers’ uncertainties about current and future economic conditions,” and noted that “these uncertainties have put a damper on overall consumer spending,” not just at restaurants. She said the decline in food-at-home prices coupled with continuing menu price increases has also led to some shifting of food occasions to retail.

One big factor in the flattening visit growth is the ongoing problems at Chipotle. For the first time in years, visits to fast-casual concepts were flat 2Q/16. In the same quarter in 2015, fast-casual visits jumped 11% versus 2Q/14. The research group said with Chipotle’s declining traffic factored out, other fast-casual visits were up 2%. Full-service traffic woes continued in the second quarter, with midscale concepts seeing a 3% visit decline for the third quarter in the past four and casual dining traffic down 2%, an improvement over the first quarter’s 4% decline.

Among the dayparts, only breakfast saw a growth in visits, up 1%. Lunch traffic fell 4% and dinner traffic 1%.

Information on NPD Group’s wide range of foodservice research is available at npd.com. “””