Rumblings of Recovery for US Restaurants

After the weakest year in more than a decade, the US restaurant sector shows signs of recovery, led by major fast food chains, according to The NPD Group.

Consumer spending in restaurants for the last quarter of the restaurant year (Sept-Nov 2003) was up 2% vs. the same period in 2002, and traffic was up half of one per cent. These are the first gains in five quarters. Fast food hamburger restaurants by comparison saw a 6% increase in traffic and 7% in spend. Overall consumer spending for the industry for the year ending November was up 1% although traffic still declined by 1% for the total industry.

The big restaurant chains account for about 50% of the total restaurant industry and saw a 4% increase in traffic versus the previous 12 months. Quick Service Restaurant (QSR) chains and Casual Dining chains led the way with a 5% increase in traffic.

Most of the improvement comes from people eating breakfast and lunch at restaurants, ancouraged by marketing initiatives and new product introductions. For the last seasonal quarter, September to November, fast food restaurants saw an increase in traffic of 3% for breakfast and 4% for lunch, with dinner 'coming in flat'. Traffic at Casual Dining restaurants was up 6% for lunch and for Midscale restaurants it was up 1%.

Average spend per person is up by less than the rate of inflation 91% vs 2%). A contributory factor is that breakfast and lunch are generally less expensive than dinner.

NPD vice president and eating habits research guru Harry Balzer is cautious about the figures: 'The industry still has yet to show strong growth. We had an uptick, driven by market leaders, but it's not enough to get customers out of their homes in droves'. However, he feels that 'While the trend is not clear, this is a good sign for the industry... This is our first indication in over a year that Americans are going out and buying meals at restaurants again. There was some concern in the last year that maybe we were moving back to our homes for more meals and that restaurant usage had peaked'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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