Restaurant industry remains in the doldrums
Restaurants continued to see a decline in traffic during the third quarter ended in September.
“This recession is generally believed to be more severe than those in recent history, and this time the industry not only realized traffic losses, consumer spending declined as well. This is first time since NPD began tracking that the industry realized a fall-off in dollars spent at restaurants,” said Bonnie Riggs, NPD’s restaurant industry analyst.
High unemployment, low consumer confidence, tightened credit, lower grocery store prices and other factors have taken their toll on restaurants, she said.
NPD's industry tracking study found that third-quarter traffic declined across all restaurant segments. Total industry traffic declined 4% from the same period a year ago. Visits to quick service/fast-food restaurants, which represent the largest share of the industry, fell 4%. The casual-dining segment was down 5%, and visits to mid-scale eateries dipped 4%. Overall, consumer spending at restaurants slipped 2%.
Riggs forecasts that the rate of decline will slow in the first half of 2010 and turn slightly positive in the second half of the year.
“Consumers have been hurt worse financially in this recession,” Riggs said. “It’s just going to take a while before they feel comfortable spending again.”-- Jerry Hirsch