NPD: What to Expect When the Recovery Begins

CHICAGO, IL (Sept. 23)—Current economic indicators point to recovery, but persistent high unemployment will continue to plague the restaurant industry several months after the recovery is underway, according to The NPD Group, a leading market research company. An NPD study conducted in June provides insights and analysis on what the restaurant industry can expect once the recovery begins, including what enticements consumers say will get them to visit restaurants more often – namely, discounts.

"The majority of the industry's challenges are related to unemployment, which isn't expected to improve quickly," says Bonnie Riggs, NPD restaurant industry analyst and author of the 'What to Expect when Economic Recovery Begins' report. "If you're unemployed, you're not going to be picking up a quick breakfast on the way to work or eating out at lunch. Dining out, overall, is a luxury you can't afford."

Affordability is top-of-mind with most consumers, employed or unemployed. When NPD asked consumers, who claimed that they have cut back on restaurant visits, what would entice them to visit restaurants more often, the top responses were:

  • Price discount on regular menu items (31%)
  • Coupon for free item, no purchase necessary (24%)
  • Dollar/99 cent offerings (23%)
  • Variety of price offerings (17%)
  • Smaller portions at lower price (10%)

Restaurants have heeded the call of these cost-conscious consumers by being aggressive in offering discounts, giveaways and other incentives. Restaurant visits that came as a result of deal represent a quarter of industry traffic, according to NPD.

"It's going to be awhile before the industry can move away from deals and other customer incentives," says Riggs. "But the industry has been in this place before, and always finds innovative and creative ways to bring itself out of it."


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