• by Karlene Lukovitz  @KLmarketdaily, April 15, 2010

While the restaurant industry is far from out of the woods yet, evidence of the start of recovery continues to grow.

Same-store sales for 47 key QSR and family-style chains showed increases in four of the past six weeks, versus the same periods a year ago -- the best performance seen in 11 months, according to The NPD Group's SalesTrac Weekly market research report.

In addition, consumer behavior patterns regarding dining out are looking more positive, according to NPD's "Light at the End of the Tunnel" report, which analyzes patterns in the current and past recessions.

As of last month, NPD found 14% of respondents reporting that they are forgoing restaurant visits in order to spend that money on "other things," an improvement over the 18% who reported the same in June 2009.

In addition, fewer people are reporting "choosing less expensive restaurants more often" as a result of the economic downturn -- 27% in March, compared to 32% last June.

Furthermore, 22% now report that they are "looking for good deals [at restaurants] more often," versus 29% reporting the same last June.

NPD's research, combined with other publicly reported information tracking restaurant industry indicators, point to consumers' more positive outlook about the economy starting to move the industry "in the right direction," observes NPD restaurant industry analyst Bonnie Riggs.

Case in point: The industry added 42,500 jobs in this year's first quarter, although total jobs are still some 251,000 fewer than in December 2007, the National Restaurant Association told The New York Times.

In addition, Yum Brands this week reported that first-quarter same-store sales for Pizza Hut rose 5% versus Q1 2009, while losses at Taco Bell and KFC moderated to 2% and 4%, respectively. In comparison, in Q4 2009, sales declined 12% at Pizza Hut, 5% at Taco Bell and 8% at KFC.

NPD's data on the chains it tracks show March sales for restaurants open for a year or more up 1% in March versus March 2009, the first monthly gain in 10 months. Still, overall restaurant industry traffic was down (by 3%) for the year ending in February, marking 14 consecutive months of decline for that key indicator.

While signs point to gradual improvement, NPD's forecasting model projects continued weakness for restaurants for at least another seven months. "Once losses moderate, it will likely take more than a year to recover lost visits," points out Riggs.