US restaurant traffic down 1% year-over-year in Q1, while delivery orders up 4%, NPD Group says; hot tea, hot chocolate and frozen/slushy coffee servings at restaurants all see double-digit increases amid extreme cold and hot weather conditions in winter
June 4, 2014
– The downside and upside for the U.S. restaurant industry in the first quarter of 2014 was that total restaurant visits dipped but delivery and other areas got a boost, reports The NPD Group, a leading global information company. Traffic to total restaurants declined by one percent in the first quarter (January, February, March) but delivery orders increased by 4 percent.
Another positive effect of the extreme cold and hot weather conditions this past winter were double-digit increases in hot tea, hot chocolate, and frozen/slushy coffee servings. Additionally, quick service coffee, donut, and bagel restaurants that serve these drinks saw traffic increase by 5 percent compared to the winter quarter of 2013, according to NPD's CREST® foodservice market research, which tracks daily how consumers use restaurants and other foodservice outlets.
"Extreme weather conditions affect consumer behavior in different ways," says Bonnie Riggs, NPD restaurant industry analyst. "The opportunity for restaurant operators is to anticipate bad weather, understand how customers react to bad weather, and put a bad weather plan of action into place."
Areas of the restaurant industry that have been struggling to increase visits for a while were further hampered by harsh weather in the first quarter. Visits to family dining (midscale) and casual dining restaurants, both of which have been challenged by long-term traffic declines, dropped in the quarter compared to year ago quarter by 4 and 2 percent respectively. Core lunch and supper business declined across all restaurant segments, and young adults, ages 25-49, continued cutting back on restaurant visits.
"It's challenging for operators to minimize the impact of bad weather, but creative marketing strategies can be used to alter consumers' decision to stay at home," says Riggs. "Consider changing or adding to the mix of menu items to include 'bad' weather items. Use social media to communicate promotions and meal incentives, and take advantage of consumers being indoors watching TV to advertise. The point is we can't control the weather but we can manage its impact on our business."
About The NPD Group, Inc.:
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data assets with unmatched industry expertise, we help our clients track their markets, understand consumers and drive profitable growth. Sectors covered include automotive, beauty, consumer electronics, entertainment, fashion, food / foodservice, home, luxury, mobile, office supplies, sports, technology, toys and video games. For more information, visit http://www.npdgroup.com and npdgroupblog.com. Follow us on Twitter: @npdgroup.