According to a new report by The NPD Group, a consumer market research outfit, the number of restaurant visits inspired by a deal or discount increased in 2013 after declining in 2012.
(Source)
Restaurant traffic enticed by deals increased by 2 percent in 2013, as opposed to the 1 percent decrease in deal-driven traffic a year ago. Restaurant visits based on “buy some, get some” or “two-for-one”-type offers had the steepest growth, with a 14 percent increase over last year.
NPD restaurant industry analyst Bonnie Riggs suggests the industry made an attempt to phase out heavy discounting last year but discovered consumers were still tightening the reins on their spending.
“It is deal related traffic that is keeping the industry from registering traffic losses,” said Riggs.
Casual dining restaurants were especially reliant on deals to lure traffic considering their ongoing problem with traffic declines. But in spite of various deals and discounts, visits to casual dining restaurants were down 1 percent for the year.
“Casual dining has really ramped up with its deals, but, unfortunately, it hasn’t stopped traffic declines, which may mean that its deal offers aren’t resonating with cost conscious consumers,” said Riggs.
Quick-service restaurant traffic remains stable with visits tied to value-meal items rising 6 percent, driving deal visits at quick-service restaurants up by 2 percent overall.
(Source)
Chains such as McDonald’s have been fine-tuning prices to sustain traffic, featuring the pricier Dollar Menu and More.
In the past, deals and special offers have driven industry restaurant visits. In 2008, deal visits increased by 5 percent and non-deal traffic was down 1 percent. In 2009, deal traffic was up 3 percent and non-deal traffic was down 4 percent.
In October, FastCasual reported that the National Restaurant Association’s Restaurant Performance Index had declined for the fourth consecutive month.
“The RPI’s September decline was due in large part to softer same-store sales and customer traffic readings, which were down from stronger levels in August,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the NRA.
Operators reported softer same-store sales results in September, and also a dip in customer traffic levels.
(Source)
“Thirty-three percent reported higher customer traffic levels between September 2012 and September 2013, down from 45 percent who reported a traffic gain in August. Meanwhile, 44 percent reported a decline in customer traffic in September, up from 38 percent in August.”
RPI’s report also notes restaurant operators are less optimistic about the direction of the economy:
“19 percent said they expect economic conditions to improve in six months, down from 23 percent last month. Meanwhile, 28 percent said they expect economic conditions to worsen in the next six months, up from 22 percent last month and the highest level in nine months.”
Inquisitive foodie with a professional investigative background and strong belief in the organic farm to table movement. Author of Bad Seeds: A FriendsEAT Guide to GMO's.
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