NPD Finds Kids and Young Adults A Shrinking Restaurant Customer Base

– While Baby Boomers increase their use of restaurants

Chicago, Il., March 31, 2009 – In addition to a challenging economy, restaurant operators are also dealing with shifting customer demographics as parents decide to leave the kids at home, and young adults, ages 18 to 24, cut back on restaurant visits, according to The NPD Group, a leading market research company. NPD’s CREST^®, which has tracked consumer purchasing and consumption patterns at commercial restaurants since 1975, shows that in 2008, restaurant visits by parties with kids declined by three percent, and restaurant visits by young adults, the most lucrative restaurant market, dropped from 254 per capita in 2007 to 233 in 2008.

NPD CREST restaurant market research finds that the increasing absence of children in restaurants is a result of cost cutting measures on the part of adults, since the average size of a restaurant party when kids are present is over twice as large as for adult only parties, driving the meal costs almost $8 higher. Both quick service and full service restaurants experienced traffic losses in 2008 with kids under 13 years old. Losses were particularly pronounced at supper, but occurred at other dayparts as well.

Although kids’ absence from the restaurant scene is a recent phenomenon, young adults have been scaling back on restaurant visits for the past five years, with the decline from 2007 to 2008 being the steepest. Young adults are among the heaviest users of restaurants, and foodservice operators expend considerable resources to attract this group. In 2008, the 18 to 24 year-old age group accounted for nearly seven billion restaurant visits and spent $42 billion.

According to the NPD report, Holding Onto“Generation Next”… The Coveted 18-24 Year-Old, young adults’ preferences are shifting. Health and food quality is top-of-mind with them. The study finds they feel restaurant food is often too high in calories, and there aren’t enough healthy/nutritious options. They also reference poor food quality, not freshly prepared, and no fresh ingredients when evaluating restaurant food.

"Considering the cost of adding kids' meals to a restaurant check, it's not surprising that adults are deciding to keep the kids at home, and I believe we'll see more kids in restaurants once the economy improves," says Bonnie Riggs, NPD restaurant industry analyst. "It's a different situation with the 18-24 year-olds, their restaurant preferences have been changing over the last few years, and it will be important for restaurant operators to understand these preferences in order to get them back in."

One group that has increased their visits to restaurants over the past year is Baby Boomers, ages 50 to 64, according to NPD's foodservice market research. In 2008, the number of per capita visits by adults, aged 50 to 64 was 209, up from 204 in 2007 and 201 in 2003.

"Restaurant operators need to understand that their customer profiles are changing and it's just not about the economy," says Riggs. "There are long-term behavioral shifts occurring and they need to have a greater understanding of who their customers are and what those customers are looking for in their restaurant experience."