Restaurants' Outlook More Rosy
Visits to restaurants may be down compared to six years ago but there’s a glimmer of hope on the horizon. New research from the NPD Group shows that there were signs of improvement in the second half of 2010.
Restaurant traffic was flat for the quarter ending December 2010, compared to a -3 percent decline for same quarter a year ago. Another sign that the foodservice industry is improving is that non-deal visits stopped declining, and spending has also started to come back. Spending rose in the last three quarters of 2010, which yielded an increase in spending for the year.
The gain brings the industry nearly back to the dollar level registered in 2008. “I believe that the improvements we’re experiencing in the industry are a result of pent up demand,” says Bonnie Riggs, restaurant industry analyst at NPD. “Consumers are tired of pinching pennies and [are] recession-weary and going to a restaurant is an affordable way to get out and have fun.”
Consumer confidence remains low, so consumers continue to scrutinize every purchase.
“There’s no question value and promotion will continue to factor heavily in their restaurant selections. It will take a lot of creativity to drive more traffic in the coming year,” she says.