Restaurant traffic is down, menu prices are up


Consumers limited trips to restaurants during the second quarter of 2022, according to the NPD Group. Inflation and rising menu prices led to a 2% decline in physical and online restaurant traffic from a year ago and a 6% decline from pre-pandemic levels. 2019.

“Consumers continue to face rising inflation and rising prices. We see three ways consumers respond to higher menu prices. They swap items at low prices, reduce the number of items ordered, or cut restaurant visits altogether,” said David Portalatin, NPD food industry adviser and author of “Eating Patterns in America.”

He said operators and manufacturers can win in this environment by differentiating value, knowing that value doesn’t always translate to the lowest price. Quality and value are becoming a critical differentiator when consumers spend on a restaurant meal during these challenging times.

The NPD said visits to quick-service restaurants (QSRs), which account for 82% of total restaurant visits, were down 2% in the second quarter. QSR fast casual restaurant traffic was down 1% in the second quarter of this year compared to a year ago, and increased by 8% compared to the same quarter in 2019.

“Full-service restaurant (FSR) visits, which account for 18% of restaurant visits, were down 3% in the quarter from a year ago and down 20% from the second quarter of 2019,” the report said.

The NDP found that dinner traffic was down 2% from the prior year period, lunch by 3% and PM snacks by 6%. Breakfast remained stable compared to a year ago, doing better on meal occasions. As consumers make fewer trips to restaurants, overall spending rose 2% in the second quarter and 3% from the pre-pandemic year of 2019 due to higher menu prices.

The National Restaurant Association reported that menu prices rose 7.7% over the past year in June, marking the biggest year-over-year increase since 1981. Even with prices menus soaring to multi-decade highs, the trade association said the gains had appeared. small compared to the large increase in what consumers pay for other items such as fuel and natural gas, which increased by 59.9% and 38.4%, respectively, over the same period, noted the trade group.

The recent increase in menu prices was the result of rising input costs, particularly food and labor, according to the trade group. Prices for full-service restaurant menus increased by 8.9% between June 2021 and June 2022, while prices for limited-service meals and snacks increased by 7.4%. Regional menu prices increased 8.1% in the Midwest, 7.8% in the South, 7.6% in the West and 7.1% in the Northeast.

Texas Roadhouse is raising prices again in October after a 4.1% price increase in October 2021. The Kentucky-based steakhouse chain said its customers were returning to normal habits despite higher menu prices. That said, the restaurant chain reported an intensification of softer traffic in July, after strong second-quarter results reported through June.

“In the second quarter, we saw our return to our historical seasonal sales trends, which we didn’t have in 2020 or 2021,” Texas Roadhouse CEO Jerry Morgan said on a recent earnings call. “As a result, we experienced a slight decline in our total traffic year-over-year as our increased in-dining customers were offset by a decrease in take-out customers.”

Texas Roadhouse reported comparable store sales growth of 7.6%, with average check size increasing 8.4% from the prior year quarter. The company saw a 3.8% increase in dining room traffic, while online takeout orders fell sharply. Overall guest traffic decreased by 0.8%. The company also reported a 4.1% lower net profit on revenue gains up 14% from the prior year period.


About Author

Comments are closed.