OPINIONFinancing

Why is restaurant traffic falling? Blame millennials

According to Technomic data, the generation has been shrinking its visits for the past year, especially in casual dining, says RB’s The Bottom Line.
Photograph: Shutterstock

the bottom line

I hate to say this, but millennials are killing restaurants.

In particular, they are killing casual dining. The generation has been shrinking its visit frequency for the past year—far more than any other population group—and that is likely having an impact on restaurant traffic.

According to Technomic Ignite consumer data, the percentage of millennials who say they visit restaurants “more than once a week” has declined to 55% from 59% over the past year.

That might not seem like much, but no other group saw that kind of change over the same period. And millennials had the highest percentage of frequent restaurant users.

Meanwhile, the percentage of millennials who visit restaurants once a month or less increased to 8% from 6%.

“It paints a pretty stark picture when you look at it,” said Robert Byrne, senior manager of consumer insights for Technomic, a sister company of Restaurant Business. “This is supposed to be that age when they’re hitting their prime with their restaurant usage.”

Byrne noted that, if millennials are saying they’re visiting less often, the impact is likely even greater when it comes to dollars spent at the restaurants, given the size of the population.

The numbers help explain why traffic in the industry continues to fall. Traffic over the past 12 months is down 2%, according to the Technomic Chain Restaurant Index.

The problem is especially acute at casual-dining chains, where traffic is down 5.8%.

Blame millennials again.

Over the past year, the percentage of millennials who are “heavy” users of casual-dining restaurants, meaning they visit once a month, has declined to 18.8% from 24.4%.

Meanwhile, the percentage of millennials who “never” visit casual-dining places has increased to 38.2% from 32.8%.

In other words, there are fewer heavy users in the country’s largest generation and more of them who say they never visit casual-dining restaurants.

“We know the advent of fast casual has changed how younger people have used restaurants,” Byrne said.

But, while consumers might not be visiting casual-dining restaurants as often, that doesn’t necessarily mean they’re replacing it with a different visit. “It could also accompany an overall decrease in restaurant usage,” Byrne said. “It’s not going to convenience stores. It’s not going to grocery stores. It’s going home.”

To be sure, millennials aren’t the only ones decreasing their visits to casual-dining restaurants.

Overall consumer visit numbers for casual dining do not look any better, according to Technomic. The overall percentage of heavy users has fallen to 13.3% from 15.8%, and the “never” users increased to 41.6% from 37.4%.

Still, the numbers for both the overall industry and for casual dining fly in the face of the state of the economy.

After all, consumer confidence is strong. Unemployment is low, and wages are rising. Yet consumers continue to tell Technomic that they are not visiting restaurants as often as they once did.

Thus, it suggests that there is only so much room in consumers' budgets, or so much time in their week, for dining out. “There is a point at which you eat X amount of meals a week,” Byrne said.

And then there’s this: What happens if the economy turns south? It’s inevitable, you know.

“What you have right now is a recipe for disaster,” Byrne said. “What if the shoe drops on the economy?”

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Taco Bell franchisee Pacific Bells continues its eastward push

One of the fast-food chain’s largest franchisees continues to acquire and open new locations. One of those new units could be in a ghost kitchen.

Technology

Here's how AI sees the need for regulating restaurant AI

Reality Check: Calls for monitoring the industry's use of the technology have been increasing. Here's the view of a major stakeholder in the matter, AI itself.

Financing

Brian Niccol is quickly making his mark at Starbucks

The Bottom Line: With more power than his predecessor, the new chief executive of the coffee shop giant is already making a bunch of moves to remake the company.

Trending

More from our partners