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Sticker Shock: Consumers are Dining Out Less, But Spending More

We last checked in on the restaurant industry a few months ago, reporting that January visits were down 2%. That decline stuck. According to The NPD Group, first-quarter 2022 restaurant visits—in-person and online—declined 2% compared to 2021 (though it was a 1% increase from 2020 when the pandemic began), partly caused by the “headwinds” of higher food and energy costs facing both consumers and restaurant owners.

Reflecting those higher costs, consumer spending for the quarter was up 4%, compared to a 7% increase in 2021.

Specifically by type of restaurant:

Reflecting that consumers were more comfortable going out to eat compared to 2021:

Looking at the dayparts, The NPD Group says visits were flat or down at all times of the day. Specifically, breakfast and dinner traffic visits were flat compared to first-quarter visits in 2021, but lunch sales, still impacted by fewer people working in offices, were down 4%. And afternoon snack traffic which was up 12% last year, was down 2% this year.

David Portalatin, NPD Food Industry Advisor and author of Eating Patterns in America, says,  “With the first quarter behind us, I’m optimistic that seasonal demand and the improving on-premises trends can help get the restaurant industry’s recovery back on track.”

In another report from The NPD Group, consumers are making even more demands for convenient dining—they don’t want to get out of the car. NPD says carry-out sales lagged drive-thru and delivery orders, in a trend that accelerated during the pandemic according to NPD’s continual tracking of the U.S. restaurant industry.

Over the two-year period from February 2020 to February 2022, digital and non-digital carry-out restaurant orders declined by 2%, delivery increased by 116%, and drive-thru grew by 20%. And the report shows the growth was powered by digital ordering, which grew by 117% in the two years. There was a concurrent decline in non-digital pick-up orders (which comprise 76% of all carry-out sales) of 16%.

NPD also reports that “Non-digital drive-thru orders increased by 20% in the same period, and non-digital delivery, which represents 25% of delivery orders, increased by 25%.”

Portalatin explains the shift: “Convenience rules and the more convenient options will win.”

 

Woman with coffee stock image by l i g h t p o e t /Shutterstock

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