• by Adrienne W. Fawcett , March 2, 2007

Coffee, snacks and temperate weather helped whet America's appetite for fast-food and chain restaurants in December.

New research from NPD Group shows consumer spending in restaurants grew 4% in December 2006 compared to the same month a year earlier. The increase reflects growing traffic at quick-service and chain restaurants, while spending at sit-down restaurants remained steady.

"We are a time-pressed society, and it's only getting worse and worse," said Michele Schmal, vice president/food services at NPD Group. "The restaurant industry is responding with appealing choices."

To keep pace with consumers' desire for less expensive food and smaller, snackable portions, several fast-food outlets have introduced value snacks. McDonald's recently added to its lineup of Snack Wrap sandwiches with a grilled chicken variety. Demand for the Snack Wrap and breakfast offerings helped propel McDonald's sales 7.2% in December compared to the same month in 2005.

KFC Corp.'s KFC restaurants sell a smaller sandwich called a Snacker, and Wendy's and Burger King have expanded their value menus, with most items costing one dollar.

According to the U.S. Department of Agriculture, half of American consumers' food budget is allocated to meals outside of the home. Coffee, NPD reports, is getting an increasingly larger share of those dollars.

"The trend toward gourmet coffee, latte, and espresso-based coffees is growing ever stronger," said NPD's Schmal. "Coffee is more available than ever. It used to be just for breakfast, but now people are drinking it in the afternoon. And the target market is expanding as younger people are getting hooked on frozen, slushy sweet drinks with some coffee flavoring."

Many fast-food outlets such as McDonald's and Dunkin' Donuts have been heavily marketing coffee in an effort to compete with Starbucks and other specialty chains. The drive-through chains have an edge. According to the NPD study, there is a growing tendency for Americans to go out for coffee and then bring it back home to enjoy. Coffee purchased at restaurants but brought back home increased 13% in December compared to the year earlier period, NPD reports. Coffee consumed in cars was up 18% in that time period.

Schmal is not optimistic that the upward blip in restaurant sales continued in January. The reason: weather.

"January 2006 was the warmest January in 112 years, and restaurant sales grew 7 percent," she said. "This year it was much colder. Weather plays a huge role. If it's not location, it's the weather."