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Industry Trends
U.S. Restaurant Industry Continues To Grow at Slow Pace but There Are Pockets of Stronger Growth 
 
Addressing the state of the restaurant industry for the last several years sounds like a broken record. Visits to restaurants will increase minimally quarter-after-quarter, resulting in an average lift in traffic of one percent annually, according to The NPD Group. All in all, the restaurant industry has been conducting business in a one percent world since 2010, and will continue at the same pace for several more years, based on NPD’s ongoing foodservice market research.
 
Pockets of Growth
Though total industry growth is moving at a snail’s pace, there are pockets of stronger growth. Though total industry traffic was flat in the January, February, March quarter of this year compared to last year, the morning meal (breakfast and am snack) continues to fuel the industry’s visit growth. In the quarter, total industry morning meal visits increased by two percent compared to same period last year and increased by four percent at quick service restaurants (QSRs).  Servings of breakfast foods increased by eight percent, and breakfast sandwiches and other breakfast items topped the industry list of growing foods.   

Combo Meal Value Wars
Restaurant visits on a deal were also an area of growth for the industry with deal traffic up two percent for total industry and up three percent at QSRs. Much of the deal traffic increase was driven by the combo meal “value wars” among the major QSR hamburger chains. Combo meal visits to traditional QSRs increased by two percent in the first quarter of 2016, and helped improve QSR hamburger visits overall. The average deal rate (percent of visits where an item was purchased on a deal) for QSRs is 26 percent. The average deal rate for the burger chains offering the combo meal value deals is 35 percent, according to NPD’s recently released report, Value Wars: A New Twist on Combo Meal Deals, which is based on an analysis using NPD’s receipt mining service, Checkout Trackings.  
 
While consumers chose QSRs over all other segments to satisfy their away-from-home foodservice needs, of particular note was the flat traffic growth in the fast casual QSR category in the winter quarter. This was a departure from the strong traffic growth fast casual chains had experienced over the last several years. Chipotle’s recent food safety issues contributed to the slowdown in the last two quarters. Taking Chipotle out of the equation finds fast casual visits up five percent.

 

“There is a confluence of changing demographics, economic pressures, and evolving consumer attitudes and behaviors creating shifts in what, where, when, and how we eat,” says Bonnie Riggs, NPD restaurant industry analyst. “The key for foodservice manufacturers and operators is to stay connected with their consumers/customers, understand their motivations and needs, and how they can offer them a unique value proposition.”  

 
The NPD Group is the industry’s leading source for foodservice trends and restaurant market research data. NPD’s CREST® service, which continually tracks consumers’ use of commercial and non-commercial foodservice, assists foodservice manufacturers, foodservice operators, and other foodservice organizations with strategic planning and positioning, product/menu development, and consumer targeting. For more information visit our website at www.npd.com.