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Mystery’s over: New data pinpoints the cause of restaurants’ traffic slide

The research shows that saturation theorists were correct in attributing traffic problems to a development binge.
Photograph: Shutterstock

Let the gloating begin: New research mathematically demonstrates that saturation theorists were correct in attributing restaurants’ traffic problems to a development binge. 

Some might call it a bender. Between 2013 and 2018, the number of chain restaurants jumped by 12.3%, or four times faster than the pool of consumers grew, according to researcher TDn2K. As a direct result, the company told attendees of its Global Best Practices Conference on Monday, guest counts dropped an average of 9% at chain outlets that were open for at least that five-year stretch. And that was despite a roughly 1% increase in the total number of transactions, the firm noted. 

The damage wasn’t spread equally across the chain sector. Traffic at conventional quick-service restaurants actually rose 3.6% on a per-unit basis between 2013 and 2018, TDn2K said. But that, according to the researcher, was the lone sector to net new patrons. A fast-casual restaurant operating during that time frame suffered a decline of about 14%, even though the whole fast-casual sector was largely the industry’s growth engine for the period. Which might be why it suffered so much over the five years.

The competition was particularly steep for full-service places because of the challenge successfully posed by independent restaurants. “Independents are definitely making an impact on those of you competing in the full-service segments,” Sheryl Coyne-Batson, TDn2K’s VP of strategic partnerships, told the audience of restaurant chain executives.

But, she said, “the good news is chains are still winning that game.” Collectively, chain outlets drove 57% of the industry’s total gain in guest traffic, according to TDn2K customers.

Although the industry has seen traffic steadily slip on a per-restaurant basis for a long stretch, there’s not been a consensus on why. Many observers have contended that the balance of restaurant supply and demand has been thrown way out of whack by all the private-equity capital that has flowed to operations in recent years. But others attributed the slide to increased competition from other channels, particularly supermarkets, c-stores and new share-of-stomach contenders such as meal kits. Still others point to heightened desire to nest at home and stream Netflix instead of using restaurants for entertainment.

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