NPD Food Chart

While convenience store operators are well developed in meeting consumer needs for convenience - and especially good at getting customers in and out quickly on the way to work - food quality had not kept up with competitive offerings. Realizing that this was a growth opportunity, many convenience store operators have placed more emphasis on, not only improving the quality of the food and beverage offerings, but also offering consumers more options that compete directly with other fast food concepts. This along, with more focus on providing consumer incentives in the form of deals has help these concepts drive traffic, particular at the morning and snack related occasion.

In addition to using c-stores to satisfy morning meal and snack needs, consumers have also continued use other retail outlets, supermarkets in particular, to satisfy their need for a convenient meal solution at dinner time. They indicate that a meal purchased at supermarket meets their expectations in terms of food quality (fresh ingredients), good tasting food, and at reasonable and affordable prices.

NPD Food Chart

Source: The NPD Group / Consumers Define Healthy Eating When They Dine Out

Americans are looking for more healthful options at restaurants and other foodservice outlets but define healthy eating based on quality features rather than fewer calories, according to NPD's report, Consumers Define Healthy Eating When They Go Out to Eat. The report finds that a significant share of foodservice traffic is driven by healthy eating behaviors and one of the top motivations for more healthful eating is to feel healthier. The feature most important to consumers seeking healthy menu options is quality, such as fresh, natural, and nutritious ingredients. Fewer calories were among the least important features.

Hispanic Families and Restaurants

NPD Food Chart

Source: The NPD Group / CREST® Hispanic

The family orientation of U.S. Hispanics extends to restaurant dining, according to NPD's CREST® Hispanic, which continually tracks U.S. Hispanics use of restaurants. Slightly over 40 percent of restaurant visits by Hispanics include children compared to 30 percent of non-Hispanic visits. Hispanics represent 16 percent of the U.S. population based on the 2010 U.S. Census, and they made 5.8 billion restaurant visits in the first six months of 2011. When making those visits Hispanics seldom go to restaurants in parties of two. They are either alone or in a group that often includes children. Forty-five percent of Hispanic restaurant visits are a group of three or more compared to 32 percent for non-Hispanics.

Foodservice Industry Traffic

NPD Food Chart

Source: The NPD Group / CREST®

Overall, 2011 can best be characterized for the foodservice industry as a year to stabilize. According to NPD's CREST, following the steep declines throughout 2009 and 2010, consumer traffic at foodservice outlets basically leveled off in 2011, much like the U.S. economy overall. There was little expectation of a strong recovery and reality matched up with those expectations fairly well. There are bright spots in the industry, such as increased visits to quick service restaurants and at breakfast, that suggest a stronger 2012 for the foodservice industry.

Millennials Made More Than 13 billion Visits to Foodservice Establishments

NPD Food Chart

Source: The NPD Group / Reaching The Millennial Generation foodservice report

Millennials made over 13 billion of the 59 billion visits made to foodservice establishments in 2010 and spent $73 billion dollars, according to the NPD report, Reaching the Millennial Generation. The clout this generation holds is largely due to its size: there are currently 52 million Millennials, ages 18 to 29, and unlike some other adult generations, their number will increase over the next ten years, driven by immigration. One of the collective behaviors among Millennials the report identifies is that they spend over half of their foodservice dollars on ordering food for takeout. As a group they spend a higher percent of their total foodservice dollars than other generations on snacks, and have a higher order incidence of snack food items like ice cream, nuggets, and mini sandwiches.

Independent Restaurants Account for 87% of Industry Traffic Losses

NPD Food Chart

Source: The NPD Group / CREST®

U.S. restaurant industry visits declined from 62.7 billion in 2008 to 60.6 billion in 2011 and independent restaurants accounted for 87 percent (2 billion) of these traffic losses, according to NPD's CREST® service, which continually tracks consumer use of foodservice. Independent restaurants, 7,000+ of which have closed since 2008, have steadily lost traffic share to the major restaurant chains, whose unit growth has only offset half of independent unit losses. Independent restaurants represented 28 percent of industry traffic in the year ending November 2008, and now represent 27 percent of the industry's visits. Restaurant chains have held a steady share of industry visits, and gained the independent restaurants' one percent share loss, increasing share from 60 percent in 2008 to 61 percent in 2011.

Fast Casual Restaurants Primed for Growth

NPD Food Chart

Source: The NPD Group / CREST® – Year Ending June 2011

Fast casual restaurants are considered to be upscale quick service restaurant (QSR) concepts that offer more service, higher quality food, and have a larger average check size than other fast food restaurants. Although still relatively underdeveloped, major fast casual chain units increased by a double-digit rate over the last three years, according to NPD's Recount®, a bi-annual census of restaurant unit counts. A recently released NPD report, entitled Fast Casual: A Growing Market, finds that even with this unit growth, consumer demand (shown as traffic in the chart) outpaced the rate of unit expansion, reflecting higher levels of consumer satisfaction with the fast casual experience.