Hope for Foodservice

April 22/Chicago/Telecommunications Weekly -- Signals are emerging that the restaurant industry is poised for a turn toward recovery, according to The NPD Group. NPD's SalesTrac Weekly restaurant market research report, which measures same store sales trends for 47 QSR and family-style chains, shows same store sales increases over year-ago in four of the past six weeks, a trend not seen in 11 months.

In addition to same-store sales, NPD reports in its new study "Light at the End of the Tunnel...What Can We Expect," which examines consumer behavior patterns through past and current recessions, that consumers' economic concerns and how these concerns influence their restaurant visit patterns are shifting. Less focused on controlled spending, price and deals, fewer consumers are saying that they are trading down in restaurant selection based on price; fewer are searching for good deals more often, and fewer are sacrificing a restaurant visit so that they can do other things.

"It's clear from our research and other indicators that consumers are feeling more positive about the economy," says Bonnie Riggs, NPD's restaurant industry analyst. "Our survey findings, combined with other publicly reported information on restaurants' improving status, suggest a move toward recovery may be starting soon, if it is not already underway."

Although there are positive indications the industry is improving, Riggs cautions that the industry is not out of the woods yet, with total restaurant industry traffic still down 3% for year ending February, a duration of 14 consecutive months of declines.

"Our forecasting model shows that the industry will remain weak for at least another seven months," says Riggs. "Additionally, once losses moderate, it will likely take more than a year to recover lost visits, but there are strong indications that the industry is now moving in the right direction."

From the April 26, 2010, Prepared Foods E-dition