On-premises restaurant dining represents $223.4 billion for industry
Chicago, July 7, 2015 — More customers are sitting down and eating their meal in the restaurant than are carrying it out or using the drive-thru, reports The NPD Group, a leading global information company. This is good news for the restaurant industry since an on-premises visit means a higher average check size than an off-premises visit. Dine-in visits represent $223.4 billion dollars annually for the industry whereas off-premises visits represent $200.3 billion, according to NPD’s ongoing foodservice market research.
On-premises restaurant visits, which now have been up for three consecutive years, increased by two percent last year over prior year while off-premises traffic declined by one percent. For the year ending May 2015, dine-in visits were up one percent and off-premises visits were flat, according to NPD’s CREST® foodservice market research. Quick service restaurants, which represent 78 percent of total industry traffic, increased dine-in visits by 5 percent last year, the highest gain of all restaurant segments. Casual dining on-premises traffic held steady in the year ending December 2014 against overall visit declines for the segment. Dine-in visits at family dining/midscale restaurants declined as did overall visits.
Consumers believe the top benefits to dining on-premises involve the experience and how good it makes them feel. Some of the reasons they provide are: Good to get out and meet someone, relaxing, I spent time with my family, fun to do, and I don’t need to worry about anything. These reasons are in line with the “experiential purchasing” trend — the idea that consumers want to do something, not just buy something — that marketers are seeing across consumer sectors. As far as reasons for selecting a restaurant, good tasting food is by far and away the cost of entry for restaurant operators looking to drive on-premises visits, followed by convenience, and service.
Given their expectations, consumers who dine-in aren’t necessarily a loyal group. Forty-two percent of on-premises diners say they are somewhat loyal to a particular restaurant or chain, 34 percent say they are loyal, and 24 percent say they are not loyal at all. Converting them to loyal visits is an opportunity for restaurant operators, finds NPD.
“The message for restaurant operators is that on-premises consumers are happier and more profitable consumers,” says Bonnie Riggs, NPD restaurant industry analyst. “Treat them right with good tasting food and the best service and a return visit is likely.”