Independent Restaurants Increase Spending with Broadline Distributors
If restaurant chains are the backbone of the restaurant industry, then independent restaurants are the heart. Despite declining unit counts for the last two years, independent restaurant operators represent a third of broadline foodservice distribution dollars, and their spending has increased year-over-year for the past two years, finds The NPD Group, a leading global information company.
The number of commercial independent restaurants dropped by 2 percent to 336,545 units from fall 2014 to fall 2015, based on NPD’s fall 2015 restaurant census, which includes restaurants open as of September 30. Although their numbers dwindled, independent operators increased their spending with broadline foodservice distributors in 2015 by 3 percent and by 5 percent in 2014, according to NPD’s SupplyTrack, a monthly tracking service that tracks every product shipped from major foodservice broadline distributors to over 500,000 commercial and non-commercial operators. Much of the spending lift in 2014 was due to an increase in the cost of ingredients. Without the purchasing power of restaurant chains and benefit of contract pricing, independents bore the brunt of the ingredient price increases. Commodity ingredient prices stabilized in 2015 and the 3 percent spending growth rate of independents is reflective of organic growth.
Broadline spending grew fastest in the south and west regions, with a 5 and 4 percent increase, respectively, reports SupplyTrack. These two regions, both of which realized a 1 percent decline in independent unit counts, had lesser declines than did the central region, with units down by 3 percent, and the Northeast region, with units down by 4 percent. The south and the west, however, outpace the central and east in overall purchases. Population growth in both of these regions could be a factor in driving some of these increases. The northeast region, typically known for its independent restaurants, posted the slowest growth among all regions.
“While independents are hardest hit by economic downturns and commodity price increases, we also know that those who were able to survive are doing well,” says Annie Roberts, vice president, NPD SupplyTrack. “Most who become independent operators do so out of a passion—to cook, to serve, to own. They have heart and those who offer good food and value are not only surviving, they’re thriving.”