Restaurant Traffic Down: Do Consumers Plan to Hold Back?

Casual DiningFebruary showed few bright signs for on-premise traffic trends, a key indicator of how hard the lingering winter weather has hit the industry.

According to research firm GuestSciences, traffic on-premise during the first eight weeks of 2014 were very weak, down -4.5%, "a concerning deterioration versus the -2.3% seen in 4Q13 and the -1.4% for overall 2013. The deterioration is almost certainly due to the unusually harsh weather conditions experienced over much of the United States over the past 10+ weeks, so key will be to see whether there's any type of rebound from potential pent-up demand as we head into the warmer months," according to the report.

Traffic to bars and nightclubs improved slightly but was still weaker than 4Q13 and 2013 overall); traffic to casual dining improved very slightly but was also weaker than 4Q13 and 2013); and traffic to fine dining was "quite a bit weaker."

Beer and spirits volume improved but were still considered weak while wine volume showed little improvement. However the company did report that craft beer and cider continued to take share from the premium light category in beer, and bourbon and Irish whiskey were the only major spirit categories to exhibit positive volume growth.

Meanwhile, a consumer survey by business advisory firm AlixPartners says consumers expect to spend less on dining out in 2014 due to concerns over health and finances.

Nearly 30 percent of American consumers say they intend to spend less on dining out in the year ahead, according to a new survey from business advisory firm AlixPartners. The annual survey of about 1,000 consumers on dining out expectations and preferences revealed that diners expect to spend about nine percent less per restaurant meal this year.

"Diners, like most American consumers today, remain stuck in the limbo of today's seemingly one-step-forward, one-step-back economy," said Eric Dzwonczyk, AlixPartners managing director and co-lead of the firm's Restaurant & Foodservice Practice. "In fact, our survey suggests that restaurants may be suffering disproportionately from that phenomenon versus other types of businesses."

The percentage of Americans who dined out at least weekly over the past 12 months dropped to 57 percent, from 60 percent a year ago. The No. 1 reason for cutting back on visits was a desire to eat more healthfully. It was the second consecutive year the "eat healthier" explanation topped concern about finances as the reason for fewer restaurant visits, AlixPartners said.

More than 80 percent in this recent survey said that “healthy menu options” are at least somewhat important to them in choosing where to dine out. However, only 20 percent said such options were “very” or “extremely” important, down from 29 percent in the survey of a year ago, and a whopping 52 percent said that nutritional information provided on menus has no impact on their ordering decisions, up from 45 percent in the survey a year ago – while only 16% said they’d be willing to pay a premium for certified organic food at restaurants, all pointing to a possible disconnect today between what consumers say they want and what they’re actually willing to order and to pay for.

Still, the survey indicated a disconnect between what consumers say they want and what they're willing to order and pay for. About 84 percent of respondents said "healthy dining options" are at least somewhat important to them when choosing where to dine out, which was about the same as the 86 percent who said the same last year.

However, this year only 20 percent said health options were "very" or "extremely" important, falling from 29 percent in last year's survey. More than half - 52 percent - said nutrition information on menus has no impact on their ordering decisions, rising from 45 percent who said the same last year. And only 16 percent of this year's respondents said they would be willing to pay a premium for certified organic food at restaurants.

Meanwhile, according to the survey, while dinner and lunch remain the most popular day-parts for dining out, the competition for the lunch patron in particular is keener than ever and could well rise to the boiling point this year. The survey finds that while casual-dining restaurants dominate dinner, with 59 percent of consumers reporting that restaurant-type to be their preferred location for dinner, and fast-food restaurants dominate breakfast, lunch is perhaps the biggest slug-fest of all. According to the survey, fast-casual (with 35 percent of diners picking that as their favorite option), fast-food (31 percent) and casual (27 percent) are close when it comes to consumers’ preference for lunch.

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