Maureen Gahan, Ireland Market, Bord Bia

A recently published report entitled “Restaurant Industry…What to Expect When Economic Recovery Begins” forecasts that the US foodservice industry is not on track to recovery anytime soon.  Although some restaurant operators are faring better than others, the industry will remain weak at least through the first half of 2010 according to the NPD Group. They forecast that the rate of visit declines will slow in the first half of 2010 before improving slightly in the second half of the year.

High unemployment, low consumer confidence, tightened credit, lower grocery store prices have all combined to affect consumers confidence and led to fewer visits to restaurants.  According to NPD, consumer usage of the foodservice industry declined across all restaurant segments for the quarter ending September 2009.  Total industry traffic declined by 4%. Visits to quick service/fast food restaurants (QSR), which represents the largest share of the industry, and mid priced restaurants fell by a similar percentage while casual dining fell by 5%. 

However, there were some signs of improvement. While consumers may be worried about the future of their jobs and falling incomes, their attitudes about the economy are changing.  According to the recent NPD foodservice survey, consumers believe the US economy is beginning to improve, or at the very least, not going to get any worse.  They are prepared to start spending again, but it may still take some time.