Restaurants Should Continue Revival In 2016

This year, restaurants and foodservice venues at last recovered the visits lost in the recession, according to The NPD Group.

The industry will end the year with visits up 1%, total traffic volume at 61 billion, and a consumer spending gain of 3%.

Quick-serve restaurants and venues were the strongest-performing segment, representing 79% of all foodservice visits and seeing 1% growth. The QSR/fast casual category's visits grew by 8%, and retail convenience store foodservice traffic grew by 2%. 

These two top-growing QSR categories are on opposite ends of the price spectrum, but both are meeting consumers’ needs for quality, convenience, and value, noted NPD Group restaurant industry analyst Bonnie Riggs.



Breakfast, the fastest-growing daypart, was a key growth driver for QSRs and the overall industry, and is still accelerating. The report notes McDonalds's all-day breakfast and Burger King's burgers for breakfast as among the contributors to the uptrend.

Consumers 50 and older drove most of the industry traffic growth, and will continue to do so in the future, reports NPD.

Important menu and flavor trends in 2015 included "all things bacon, BBQ and steak," notes Riggs, as well as hot and spicy items such as sriracha, ghost peppers and jalapeños, which are particularly appealing to Millennials and Gen Z. 

NPD Group forecasts that overall restaurant/foodservice traffic will grow by 1% again in 2016.

"It's been a long, slow recovery, but the foodservice industry has recovered nearly all of the steep traffic losses incurred after the recession began in 2008,” sums up Riggs. "QSRs have and will continue to support the traffic gain, casual dining visits are forecast to hold steady, and midscale restaurants to decline by 1%."

She adds that "with continued focus on consumers' ever-changing wants and needs, the industry can alter the current forecast of minimal growth."

The National Restaurant Association's chief economist, Bruce Grindy recently offered a similarly positive assessment of the restaurant industry's recent performance.

He cited preliminary U.S. Census Bureau data showing that eating and drinking place sales totaled $53 billion on a seasonally-adjusted basis in November, representing a strong 0.7% increase over October’s sales volume of $52.6 billion.

Importantly, he pointed out, November marked the 10th consecutive month of restaurant sales growth, with monthly gains not falling below 0.3%.  As a result, November’s seasonally adjusted sales volume was $2.6 billion or 5.2% higher than January’s.

That consistent upward curve contrasts with the somewhat erratic performance of retail as a whole, Grindy added.

Excluding eating and drinking places, total retail spending rose less than 0.1% over the past four months combined, but restaurant sales were up 1.8% during the same period.

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