Morning Meal & Combo Deal Visits Lead Restaurant Industry

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Morning Meal & Combo Deal Visits Lead Restaurant Industry


CHICAGO — Morning visits and combo meal deals are likely to fuel growth in segments of the restaurant industry, which is otherwise facing the same rate of growth that it has since 2010 and is likely to continue for several more years, according to The NPD Group. Visits to restaurants will increase minimally quarter after quarter, leading to average traffic growth of 1 percent annually.

Although total industry traffic was flat during the first quarter of 2016 compared to the same quarter last year, the morning meal (including breakfast and morning snacks) continues to fuel visit growth, according to NPD's ongoing foodservice market research.

Total industry morning meal visits increased by 2 percent during Q1 2016 compared to Q1 2015, and quick-service restaurants (QSRs) saw a 4-percent lift. Servings of breakfast foods increased by 8 percent, with breakfast sandwiches and other breakfast items topping the industry list of growing foods.

Restaurant visits on a deal also served as a growth area, with deal traffic up 2 percent for the total industry and 3 percent at QSRs. Combo meal "value wars" waged among the major QSR hamburger chains served as a primary driver of this growth.

Combo meal visits to traditional QSRs increased by 2 percent during Q1 2016 and helped improve QSR hamburger chains overall. Additionally, the average deal rate, or percent of visits where an item was purchased on a deal, for QSRs is 26 percent while the average deal rate for burger chains offering the combo meal value deals is 35 percent, according to NPD's report "Value Wars: A New Twist on Combo Meal Deals."

While consumers selected QSRs over all other segments to satisfy their away-from-home foodservice needs, the flat traffic growth in the fast casual QSR category during the winter quarter was particularly noteworthy, according to the report. This marked a departure from the strong traffic growth fast casual chains experienced in recent years. Chipotle's food safety issues contributed to the slowdown seen in the last two quarters, as taking Chipotle out of the equation results in fast casual visits being up 5 percent.

"There is a confluence of changing demographics, economic pressures and evolving consumer attitudes and behaviors creating shifts in what, where, when, and how we eat," stated Bonnie Riggs, NPD restaurant industry analyst. "The key for foodservice manufacturers and operators is to stay connected with their consumers/customers, understand their motivations and needs, and how they can offer them a unique value proposition."