Stagnant Restaurant Traffic Worries Some

Stagnant 2016 restaurant traffic worries some food industry analysts, even though individual spending was up.

As goes the US quick service restaurant segment, so goes the total foodservice industry, said NPD Group in a release Wednesday.  NPD Group is a leading consumer trends research firm based in Chicago.

QSRs, which represent 80% of total commercial foodservice visits, saw no traffic growth in 2016, and total foodservice traffic dipped slightly, reported the NPD Group.

Visit declines at lunch, which represents the largest traffic period of the day, was a major contributor to the US foodservice industry’s 2016 traffic slump, the group said.  Lunch visits declined 2% at QSRs and all other foodservice outlets.

Among the reasons lunch traffic was down were a smaller labor force participation rate, increases in the number of employees working from home and more consumers shopping online and not grabbing a meal while they’re out shopping, NPD Group said.

Weekend, dinner, and independent restaurant visit declines also prevented the industry from growing last year, the release said.

Though US foodservice traffic isn’t growing there were still close to 62 billion visits made to restaurants and other foodservice outlets last year, reported NPD Group.




QSR consumer spending increased 3%, while total-industry spending rose 2%, the group said.  All spending gains were driven by an increase in average eater check size.

Other industry bright spots last year were the continued strength of morning and PM snack, drive-thru visits, combo meal deals, and an increase in breakfast food servings.

“The dynamics that have driven the foodservice industry for all these many decades are changing and changing quickly,” said Bonnie Riggs, NPD Group restaurant industry analyst, in the release.

“There will always be a need for foodservice, but there is a shift in consumer attitudes and behavior, and the landscape is different,” Riggs said.  Operators and manufacturers need to heed the changing dynamics and adjust their strategies accordingly.”




Behind the scenes, challenges loom for the restaurant industry, not the least of which is the Affordable Care Act, which the National Restaurant Association says “needs some reasonable, common-sense changes.  On its web site, the NRA urged Congress to make changes in five key areas:

  • Bring the ACA’s definition of “full time” in line with typical workplace standards – in other words make it 40 hours a week instead of 30.
  • Simplify and streamline employer reporting requirements. As the rules now stand, restaurants can apply simplified reporting only to parts of their workforce.  Current rules also require employers to collect tax ID or Social Security numbers for full-time employees’ dependents; there should be an alternative to collecting this data.
  • Raise the threshold that determines which businesses are treated as “large” to parallel Small Business Administration standards.
  • Make the seasonal-employment definition consistent. As it stands, there are two, one for seasonal worker and one for seasonal employee.




Average fed cattle exchange auction prices last Wednesday were $3.13 per cwt lower at $118.84, versus $121.97 a week earlier.

Cash cattle then traded at $119 to $120.50, mostly $119.75 to $120.50, on a live basis, up $0.50 to $0.75.  Dressed-basis trades last week were $3 to $4 lower at $190 per cwt versus $193 to $194 the previous week.

The USDA’s choice cutout Wednesday was down $0.53 per cwt at $189.43, while select was off $1.29 at $186.49.  The choice/select spread widened to $2.94 from $2.87 with 139 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Tuesday was $127.28 per cwt, up $0.22.  This compares with Wednesday’s Mar settlement of $122.30, down $1.92.