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Income
Gap and Shrinking Middle Class
Take
a Toll on Restaurant Industry, Reports NPD
New
York State Must Return $2.5 Million in Federal Aid for Acquisition of Iconic
Follensby Pond Tract Due to Lack of Matching Funds
Chicago,
IL – September 2014 / Newsmaker Alert / The gap between high- and low-income
groups is the widest it has been in 100 years, and the share of U.S. consumers
who identify with the middle class has never been lower. Like other retail
sectors, the restaurant industry is feeling the effects of this cultural
and economic phenomenon, reports The NPD
Group, a leading global information company. One of the effects of
income bifurcation is that visits to quick service restaurants, which have
an average check size of about $5, were flat in the year ending June 2014
compared to same period last year, and visits to fine dining restaurants,
which have an average check size of $40, were up 3 percent. Total restaurant
industry traffic was flat for the period.
The
challenge is that about 80 percent of restaurant visits are at quick service
restaurants and the growth in fine dining visits, which holds only a single-digit
traffic share, isn’t enough to increase overall traffic, according to NPD’s
CREST®
foodservice market research. Low-income consumers, who are heavier
users of quick service restaurants, were most adversely affected by the
Great Recession and have less discretionary income to spend on dining out.
With low-income visit cutbacks and not enough fine dining traffic to make-up
for traffic declines, restaurant operators will need to appeal to the middle-class
to fill the gap, says NPD.
“Although
the percentage of consumers identifying themselves with the middle class
is shrinking, this group still represents a large segment of the population
and shouldn’t be ignored,” says Bonnie
Riggs, NPD’s restaurant industry analyst. However, offering a good
product at a fair price is no longer good enough. To attract them will
take a deeper understanding of what they want when dining out.”
Consumer
attitudes and behaviors have changed since the Great Recession began and
may well have changed for good,” says Riggs. “But the fact remains that
Americans still make billions of visits to restaurants each year, but they
are more conscious of their spending and want to be certain that the return
on their investment in a restaurant meal is a pleasurable dining experience
that meets their needs and expectations.”
About
The NPD Group
The
NPD Group provides global information and advisory services to drive better
business decisions. By combining unique data assets with unmatched industry
expertise, we help our clients track their markets, understand consumers,
and drive profitable growth. Sectors covered include automotive, beauty,
consumer electronics, entertainment, fashion, food / foodservice, home,
luxury, mobile, office supplies, sports, technology, toys, and video games.
For
more information, visit www.NPD.com and
npdgroupblog.com.
Follow us on Twitter: @npdgroup.
Contact:
Kim
McLynn
Public
Relations Director
847-692-1781
The
NPD Group, Inc. |
