NEW YORK — Food inflation is driving supermarket prices up, while restaurants are offering deep discounts on meals in an effort to build traffic. As these two trends converge, diners are beginning to return to restaurants for dinner after more than three years of declining visits, according to NPD Group data reported by Nation's Restaurant News, a sister publication of SN.
Since the beginning of the recession in 2007, restaurant dinner traffic has been in decline, especially at casual-dining restaurants. But, according to NPD's CREST service, which tracks consumer use of all foodservice outlets, total visits have been slowly rising during the past three quarters. Dinner traffic was up 2% in the third quarter of 2010, up 1% in the fourth quarter, and up another 2% during the first quarter of 2011.
“The improvement may reflect some easing in unemployment, a modest improvement in consumer confidence, as well as a release of pent-up demand during the periods reported,” said Bonnie Riggs, NPD restaurant industry analyst. “I also believe that rising food costs in-home have narrowed the gap between the price of food at home and a restaurant meal.”
Growth in the quick-service sector drove much of the increase, as QSRs drew customers with aggressive promotions for inexpensive family meals, such as 10-piece buckets of chicken for $10 at KFC, or $7.99 carryout specials at Domino's Pizza.
Casual dining chains struggled to maintain dinner traffic, despite similar discounts.