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Ready-to-eat may trump restaurant during economic downturn

A report out of the US notes that restaurants there may be hard hit during the current economic slowdown as consumers opt for more ready-to-eat or frozen meals from grocery stores.

March 18, 2008  By


U.S. restaurants may be particularly hard hit during the current economic downturn as shifts in consumer eating patterns are exacerbating the situation, according to a new study by consumer research firm NPD Group Inc.


In a new report titled, "Why This Downturn Will be Different for Restaurants," NDP said during the past year consumers have eaten more breakfasts and snacks at restaurants but fewer dinners and, historically, it was dinner traffic that held up during difficult economic times.

"Consumers are getting fewer main meals at restaurants and even though inflation at supermarkets is the highest it's been in 17 years, there are more, fast and inexpensive options available to consumers at grocery stores that didn't exist years ago," report author Bonnie Riggs said, noting the rise of ready-to-eat and frozen meals.

While women joining the workforce drove restaurant industry growth over the last several decades, that trend may be over. In fact, "The trend in working women may be more of a long-term issue for the industry than the current economic situation," said NPD Vice President Harry Balzer.

The restaurant industry posted no organic growth in 2007. Total customer traffic was up only 0.7 percent, driven primarily by unit expansion, suggesting traffic was flat on a comparable-store basis. This is the smallest traffic gain since the 2000-2003 period, NPD said.


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