The NPD Group Unveils Latest Results of CREST ® Report
Moscow, August 5, 2015 — Traffic in the foodservice market declined 1 percent in the 12 months ending March 2015, which equates to a loss of 12 million consumer visits, according to the latest Consumer Reports on Eating Share Trends (CREST®) from leading global information company, The NPD Group.
While traffic during the first half of the 12-month period ending March 2015 was relatively successful for Russian operators, losses escalated into 2015. During the first three months of 2015 (Q1’15), traffic declined by 5 percent versus the same time period last year.
To counter these losses, foodservice operators have worked to attract customers with promotions and special offers, an effort that has been paying off; visits to foodservice establishments with at least one commercial offer such as coupons, free items, student pricing, and BOGO (buy one get one free) grew by 3 percent over the 12 months ending March 2015. The same positive trend is visible in Q1’15, with visits to take advantage of promotions and special offers increasing by 3 percent.
Fast food restaurants were the most successful in applying this approach. Their visits continue to grow, increasing 3 percent in the 12 months ending March 2015, and 1 percent in Q1’15. Close to one-third of all fast food restaurant customers choose a special offer during their visits (a combo meal or a commercial offer). Share of these visits, including an offer or a combo meal, varies from 30 percent to 40 percent depending on the quick service restaurant segment (burgers, sandwich shops, street kiosks, Asian and ethnic food, quick service pizza, Russian quick service players).
Over the last 12 months, visits with special offers to quick-service restaurants (QSR) grew by 10 percent, helping these restaurants to not only survive, but also increase their traffic during these hard economic times. The customer, however, now orders less meals than before, and has begun replacing expensive items with more affordable ones. The products and drinks that experienced the highest losses were those that can be easily replaced by in-home consumption (e.g., tea and desserts), or expensive items such as alcoholic drinks. Meals that gained in popularity in QSR restaurants over the 12 months ending March 2015 included more orders of coffee drinks (+9 percent), breakfast items (+11 percent), pasta and noodles (+19 percent) and soups (+6 percent).
With a 15 percent decline in traffic in Q1’15, full-service restaurants (FSR) are not faring as well. While almost all food and drink products have been severely affected by traffic losses, there are some rare exceptions that showed some increase in servings, including coffee drinks and some local Russian cold drinks (e.g., mors and kvas), that customers are now ordering more often to replace the more expensive soft drinks and juices.
“With weakening domestic demand, Russian foodservice will continue to slowdown in 2015,” said Maria Bertoch, Foodservice Industry Expert. “Restaurants should adapt their price strategies for different consumer groups, including those with limited budgets. Nevertheless, changing a price format is not always a good solution, especially with the current high inflation in Russia. This long-term crisis we are facing means each operator must be more strategic with their business decisions, adapting their businesses to fit the needs of today’s economy and customers.”