News

Study: Independent restaurants struggling to survive in flat food service economy

September 19, 2016

While the total number of restaurants nationally has dropped slightly, the losses in numbers are mostly among independent eateries, particularly those which revolve around "slower" dining options like casual, fine and family dining, according to NPD Group's 2016 Spring ReCount restaurant census.

The data, which includes restaurants open as of this past March 31, indicates the springtime count for restaurants nationwide stood at 624,301 locations — down a full percentage point from spring 2015’'s count. The number of chain restaurant units remained flat from the previous year at 292,382, while the number of independent restaurant units fell by 3 percent in that same period, according to a news release about the most recent data.

NPD Group said the most recent survey indicates that full-service independent restaurants have been hit hard in the softer industry environment of the last year. This includes casual, fine and family dining options. But the release said that while the number of full-service independent restaurants fell 3 percent on the year, the number of quick-service independent units dropped by 2 percent.

"The decline in U.S. restaurant units overall is a reflection of the industry's stalled traffic growth," said NPD Foodservice Product Management Director Greg Starzynski, in a news release about the findings.  "Our forecast finds that U.S. food-service visit growth will be less than one percent in the coming years, which means there will not be significant unit expansion for a while."  

The food service industry has been soft nationally for several years now, and NPD Group said these numbers reflected that stalled growth. In fact, food service overall traffic was flat for the year ending June 2016, compared to the previous 12 months. 

The research, however, indicates that while major chain traffic gained a percentage point on the year, small chains remained flat and independent restaurant traffic dropped 3 percent. According to NPD Group, about 80 percent of total restaurant traffic goes to the quick-service category, where visits were up 1 percent. But traffic at family and casual dining options fell by 4 percent and 3 percent respectively.