NPD: Independent Losses Drive Another Decline In Total Restaurant Units

The number of restaurants in the U.S. fell again in the year ended March 31, 2016, according to the latest data from The NPD Group’s ReCount restaurant census. Total net units stood at 624,301, down 1% from the 632,572 total a year earlier. All the losses were among independent restaurants whose counts dropped by more than 9,000 units, or 3%, to 331,469. Chains added more than 1,000 net new units. It is the second year in a row that total units counts have fallen in the U.S. The total number of restaurants peaked in the post-recession period at 635,494 in spring 2014.

Declining restaurant unit counts are the current reality in a very mature U.S. foodservice market that has seen little traffic growth since the end of the Great Recession. As we reported two weeks ago in FER Fortnightly, restaurant traffic, which rose 1% in 2015, has been flat the first two quarters of 2016. In releasing the ReCount data, NPD said overall traffic was flat for the year ended June 2016, with limited-service restaurants, including fast-casual and coffee café concepts, seeing a 1% gain, offset by a 3% decline in visits for full-service concepts during the 12-month period. Independent operators dominate full-service. Major chains, those with more than 500 units, saw traffic increase 1%, while smaller chain visits were flat and independents saw traffic decline 3%. In an earlier report, NPD said traffic fell among independents in every single region of the country in the second quarter 2016, versus the year earlier quarter.

And things are not likely to change any time soon. NPD predicts. “The decline in U.S. restaurant counts overall is a reflection of the industry’s stalled unit growth,” said Greg Starzynski, director-product management for NPD Foodservice. “Our forecast finds that U.S. foodservice visit growth will be less than 1% in the coming years, which means there will not be significant unit expansion for a while.”

For more information on NPD foodservice research, go to npd.com.     “””