High Unemployment Forces Hispanics to Cut Back on Restaurant Visits

CHICAGO -- Approximately one in 10 U.S. Hispanics are unemployed, and the economic impact is being felt across the restaurant industry, according to new research released by The NPD Group.

The research company's CREST Hispanic service, which tracks U.S. Hispanics' daily restaurant visits, indicated U.S. Hispanics visited restaurants 9.6 billion times in 2012, a decline of 1 percent vs. 2011. This loss occurred despite the fact that total U.S. restaurant visits increased by 1 percent in 2012 compared to 2011.

"U.S. Hispanics are an increasingly important customer base for the foodservice industry — they made some 9.6 billion visits in 2012 and spent $63 billion," said Bonnie Riggs, NPD's restaurant industry analyst.

In determining a contributing factor to the declines in Hispanic foodservice visits, NPD pointed to a high unemployment rate among U.S. Hispanics, which averaged 10.3 percent in 2012 compared to a national average of 8.1 percent.

More specifically, NPD found that declines in restaurant visits have been steepest among bicultural U.S. Hispanics, who made 2 percent less visits last year compared to the year prior.

Bicultural U.S. Hispanics are generally younger as a group than non-Hispanics, and 34 percent of U.S. Hispanic restaurant visitors are between the ages of 18 and 34, according to CREST Hispanic, which also tracks Hispanic foodservice usage by level of acculturation. Although they are the most frequent restaurant visitors among Hispanics, this group cut back on their visits last year more than any other U.S. Hispanic age group.

In contrast to their declining visits, NPD found that Hispanics paid more at restaurants in 2012. Their average check rose by 4 percent from a year ago, indicating their shift away from value menus, most likely due to the change in offerings or price increases, according to the study.

As CSNews Online recently reported, The NPD Group studied a decline in dollar/value deal related traffic for the year ended August 2012. This trend is likely tied to a move away from 99-cent items and the type of food items being offered on these menus. Many consumers perceive them to be the way to order individual items, smaller meals or the way to "build your own combo."

Quick-service restaurants (QSRs) still held 84 percent share of U.S. Hispanic restaurant visits in 2012, a 1-percent increase in share from 2011, and higher than the 78 percent share of QSR visits claimed by non-Hispanic traffic.

Meanwhile, Hispanics' use of full-service restaurants is historically below average and their visits to this segment lagged even more in 2012.

"Understanding how, why and when U.S. Hispanics use restaurants and other foodservice outlets can help operators and supplier partners focus on efforts to entice this group to visit," concluded Riggs.