U.S. food service sector shows improvement

by The City Wire staff ([email protected]) 101 views 

The national food service sector posted a 1% increase in restaurant traffic during the first quarter of 2012. While the uptick was nominal, it was the strongest gain in four years, according to a large survey by market research firm NPD Group.

The rise in traffic at commercial food service outlets, led by visits to quick-service stores as well as fining-dining restaurants, was the highest since spring 2008.

Unusually mild winter weather drew people out of the house to start the year, but NPD cautioned that the economic environment would remain a challenge for the sector going forward.

“We forecast a slowdown in traffic growth for the balance of 2012 as the country continues its slow economic recovery,” said Bonnie Riggs, NPD restaurant industry analyst.

The group also found that U.S. diners spent 3% more dining out this winter than they did a year ago. NPD says half of that increase is related to higher menu prices.

Visits to quick-service restaurants rose 2% from the same quarter last year, according to NPD.

McDonald’s is often seen as a bellwether for the quick service channel with 33,000 restaurants in 119 countries. Year-to-date through May, McDonald’s says same-store-sales are up 5.6% — that includes a 6.8% jump in the U.S. with smaller gains in Europe and Asia. McDonald’s expects the slowing global economy to show up in its second quarter profits that will be reported in July.

Locally, restaurant taxes collected in Bentonville and Fayetteville through May registered double-digit tax gains in 2012 from a year ago. The cities each reported strong first quarter results with numbers pulling back slightly in the last month or so.

In the Fort Smith metro area, Van Buren also collects a 1% prepared food tax and reported single-digit gains from a year ago through the first quarter.

NPD found that fine dining and upscale hotel restaurants generated a 6% increase in traffic in the first quarter while the midscale/family dining segment continued to struggle — with 3% fewer visits.

NPD tracks the foodservice industry based on consumer reporting of over 400,000 annual visits to commercial as well as non-commercial foodservice outlets.

Morning meals remain the most popular up 3% from a year ago, with lunch and dinner holding steady, according to the NPD survey.