The restaurant industry is an economic bellwether and the read for the first quarter of 2017 is steady as she goes, reports The NPD Group, a leading global information company, which continually tracks the foodservice industry. Consumer spending grew by 1.3 percent and visits to restaurants and foodservice outlets held steady. On the supply chain side, operators at eating and drinking establishments and retail foodservice outlets increased their dollar spend with the major U.S. broadline distributors by 1.7 percent and cases ordered by 0.5 percent.
The foodservice industry, like other sectors, has areas of growth and weakness. Areas offering the most convenience to customers, like delivery and drive-thru, grew in the first calendar quarter of the year by 2 and 3 percent respectively, according to NPD Group’s CREST® foodservice market research, which tracks daily how U.S. consumers use restaurants and foodservice outlets. Morning meal, the most affordable and convenient daypart, grew by 1 percent. Restaurant visits on a deal or discount increased by 2 percent. Fast casual restaurants, included under the quick service restaurant segment, grew visits by 3 percent mainly due to unit expansion. SupplyTrack®, which tracks monthly sales of every product shipped from a critical mass of leading broadline distributors to each of their foodservice operators, reports that eating and drinking establishment micro-chains, chains with 3-19 units, fared best among operator system sizes, by increasing their spend with broadline distributors by 4.6 percent and cases ordered by 3.0 percent.
Many of the weak areas of the industry have been declining since the recession, which is the case with casual dining and midscale/family dining traffic. Visits to casual dining restaurants fell by 4 percent and to midscale/family dining by 3 percent. Dinner traffic has also been challenged for several years now, and in the first quarter visits declined by 2 percent. Lunch traffic was flat in the reporting period but declined in previous quarters, which is a reflection of more working at home, shopping online, and other changing behaviors.
“The foodservice industry is a vibrant and very much needed sector of the U.S. economy. The pockets of growth and weak areas are a reflection of what today’s foodservice consumers need and want, and provide directional guidance to restaurant operators and foodservice distributors and manufacturers,” says Warren Solochek, president of NPD Group’s foodservice practice. “Although consumers’ attitudes and behaviors are shifting, the reasons that they choose foodservice remain the same — convenience, quality food, value, and the experience.”