Restaurant Industry Has Long Road to Recovery

According to Nation’s Restaurant News, “The restaurant industry is well on its way to recovery, but it has yet to rebuild traffic to pre-recession levels, according to The NPD Group, which said further gains will be spurred by product innovation, unit redesigns and a move away from discounting.”

“Despite improvement, per capital restaurant visits in 2010 reached only the same levels seen in 2005 as consumers continue to spend cautiously, Warren Solochek, vice president of client development for The NPD Group, said during a webinar presented Friday by Morgan Stanley restaurant analyst John Glass. ‘We are absolutely back at 2005 traffic levels because we dropped so many visits in 2008 and 2009,’ Solochek said. ‘[The decrease] was consistent across high- and low-income groups. We asked people why they cut back on restaurant visits, and the vast majority say, … ‘What if I lose my job? I need to save for a rainy day.’ When we ask what it would take to bring them back [to dining out], a lot of them say an improvement in the economy.’ In order to get customers back, restaurants should focus on developing new menu items and updating their locations, so that customers have different reasons to visit restaurants and to perceive getting a good value for the dollars they spend, Solochek said.”

Read more: http://nrn.com/article/restaurant-industry-long-road-recovery#ixzz1JJfvKyaP