Tighter finances have consumers watching their disposable income more closely.
Total consumer foodservice visits declined by 1 percent in the third quarter compared to the same quarter last year, according to data from The NPD Group. Quick service restaurant traffic, which represents 80 percent of total industry visits, dropped for the first time in 5 years.
“Over the past six months restaurant industry traffic growth has come to a standstill and quick service restaurants, which have been the traffic growth drivers, are now experiencing a slowdown in visits,” says Bonnie Riggs, restaurant industry analyst at NPD.
In her report Losing Our Appetites for Restaurants, Riggs cites several factors for the decline, including the fact that rising healthcare costs and/or student debt have reduced the amount of disposable income consumers have in their wallets.
In fact, 75 percent of consumers who decreased their restaurant visits say they watch how they spend their money on most or all purchases, and a high percentage of these respondents think that restaurant prices are too high, according to NPD Group’s Checkout Training study. Along those lines, NPD also reports the cost of the average restaurant meal has risen 21 percent over the last decade.
Combining lower grocery prices with higher menu prices results in a wider price gap between eating at home and dining. Eighty-two percent of all meals are now consumed in-home, NPD reports.
Despite an evolving consumer mindset, Riggs remains optimistic about the future of the restaurant industry. “The marketplace is changing and despite improving economic indicators, the consumer landscape is fundamentally reshaped,” says Riggs. “What hasn’t changed and won’t change is the consumer’s need for foodservice; it saves them time and provides them with an experience.”