Have you noticed a decrease in the amount of people dining at your favorite restaurants lately?
Well, a recent expert analysis by the global investment banking firm, Jefferies & Co. shows national restaurant earnings trends have weakened during the second quarter. It may come as a surprise that quick service or fast food style restaurants are holding on strong against the falling market trends especially when compared to full service restaurants.
According to an article on Nation’s Restaurant News, full service restaurants have been hit the hardest during this recent decline.
The instability in the economy plays the largest role in consumers dining choices. According to Jefferies’ analysts:
“Customers continue to struggle with economic/employment uncertainty, and affordability and value matter more than ever.” (per the NRN article).
The article also said that despite efforts made by casual dining restaurants such as discount and promotions, net traffic is dwindling.
Analysts even found a correlation between the rise in gas prices and the decrease in the amount of restaurant traffic.
“While gas prices spiked in March and have since come down, sales trends across the full-service restaurant industry have decelerated,” the Jefferies team noted in their report.
So the question remains why are fast food businesses doing better than full service restaurants? Is it just because of convenience and affordability?
The truth is, quick service restaurants have been exploring new concepts such as: menu ingenuity, creative advertising, and well-priced quality food.
Many fast food establishments have revamped their menus and created campaigns that showcase their efforts to become more affordable options to casual dining.
So, what are full service restaurants going to do to regain business?
In the NRN article analysts noted that consumers are looking for value, service, and atmosphere. With a good business plan and those qualities full service restaurants will recover.
The Restaurant industry proves to be unpredictable, as noted in another recent article on Nation’s Restaurant News, see how casual dining is making its recovery.
As the national restaurant market has declined in the past few months, have you noticed a change in RVA? Would you prefer a fast food option to your favorite dining dive in the city?