NPD: Restaurant Deals Need a Refresh

CHICAGO -- Restaurants need to hit the reset button on some deals and special offers that once drove traffic to the industry during the recession, according to new research by The NPD Group.

The research company's recent report, "Planning for Growth in the New Normal Marketplace," found that nearly all types of restaurant deal visits are down with younger consumers, particularly combo meal deals and value meals, with strong declines in the last few years. In addition, deal checks have risen over time, and the disparity between deal and non-deal checks is not vastly different.

"Deals and special offers definitely influence restaurant visits, and if it weren't for deals during the recession, the industry would have fared much worse, but some of the deals being offered today aren't resonating with consumers," said Bonnie Riggs, NPD's restaurant analyst. "Considering current consumers’ sentiment and their continuing frugality, the deals that have historically appealed to restaurant customers need to be re-engineered and the next generation of deals introduced."

At the height of the recession in 2008, restaurant industry traffic was down, and deals and special offers drove visits. More specifically, deal traffic was up 5 percent and non-deal traffic was down 1 percent, and in 2009 deal traffic was up 3 percent and non-deal traffic down 4 percent, according to NPD's CREST, which tracks the foodservice industry based on consumer reporting of over 400,000 visits to foodservice outlets each year.

In 2012, after many of the promotions that were created during the recession had been in existence for a few years, restaurant deal visits declined by 3 percent and non-deal traffic was up 2 percent.

As CSNews Online previously reported, NPD found that for the year ending in August, the decline in dollar/value deal related traffic was likely tied to a move away from 99-cent items and the type of food items being offered on such menus. While the total number of combo meals ordered was up, the percentage of consumers indicating they ordered a combo meal "on deal" was down.

This could mean that consumers no longer perceive combo meals to be a deal, or that combo meals have become the everyday price and a way to order a full meal, stated NPD.

                    Source: The NPD Group, year ending December