NPD: Deals No Longer Driving Restaurant Growth
With restaurant visits on a deal or discount down last year, it appears that restaurant customers may perceive the price of deals offered over a length of time as regular pricing, according to The NPD Group, a leading global information company. NPD’s foodservice market research reports that restaurant visits on a deal were down 3 percent in the year ending December 2012 compared to same period year ago. Combo meals and value menu item offers, two of the most frequently offered deals, are largely responsible for the decrease in deal traffic. Visits that included coupons, buy one-get-one, and discounted price were up.
At the height of the recession, when industry traffic was down, deals, and special offers drove industry restaurant visits. In 2008, visits on a deal were up 5 percent and non-deal traffic was down -1 percent, and in 2009 deal traffic was up 3 percent and non-deal traffic down 4 percent, according to NPD’s CREST, which through its daily tracking captures more than 400,000 consumer restaurant visits a year. In 2012, after many of the promotions that emerged during the recession had been in existence a few years, restaurant deal visits declined by 3 percent and non-deal traffic was up 2 percent.
A recently released NPD report, Planning for Growth in the New Normal Marketplace, finds that nearly all types of deal visits are down with younger consumers, particularly combo meal deals and value menus, with strong declines in the last few years. Deal checks have risen over time and the disparity between deal and non-deal checks is not vastly different.
“Deals and special offers definitely influence restaurant visits and if it weren’t for deals during the recession the industry would have fared much worse, but some of the deals being offered today aren’t resonating with consumers,” says Bonnie Riggs, NPD’s restaurant industry analyst. “Considering current consumer sentiment and their continuing frugality, the deals that have historically appealed to restaurant customers need to be re-engineered and the next generation of deals introduced.”