After 10 consecutive months of traffic gains, the US restaurant industry's recovery stalled in January, reports The NPD Group.
Physical and online visits to US restaurants were down 2% in January compared to an 8% decline in January 2021. The 4% increase in consumer spending at restaurants reflects higher food and operational costs.
Total restaurant traffic, online and physical, is down 10% from the pre-pandemic level in January 2020, according to NPD's tracking of the US foodservice industry.
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Online and physical visits to quick service restaurants (QSRs), which represent the bulk of industry traffic and historically have led the industry out of challenging times, declined by 3% in the month compared to a year ago when visits decreased by 3% in January 2021, down 7% from January 2020.
Full-service restaurant traffic increased by 2% this January, over a 22% decline in January 2021, and was down 21% from two years ago, before the pandemic.
Limited-service restaurants, on the other hand, saw sales grow 9.7% in 2021 from 2019 levels, according to a JLL post. QSRs remain popular with diners who have gotten accustomed to getting a quick bite, JLL said, but also pointed out that geographical differences in dining, market by market sales performance are bound to be widely varied.
JLL, though, offers a bright spot for the industry: restaurants are expanding once again. The number of fast-food chains rose 6.9% in 2021, chain restaurants grew 6.9% and single-location restaurants jumped 7.5%, according to IBISWorld Industry Reports. QSRs like Chipotle and Jersey Mike's are adding hundreds of restaurants in the next year.
Expect Volatility Ahead
"No one ever said the road to recovery would be smooth and steady," David Portalatin, NPD Food Industry Advisor and author of Eating Patterns in America said in prepared remarks. "Right now, we're experiencing a dip in the road due to the omicron variant and stimulus money expiring.
"Looking ahead, we should expect volatility. February restaurant numbers will be compared to a rough February last year because of extreme weather. My advice is don't get too discouraged by January or too elated if February seems great. Just stay the course because we're on a steady path of gradual improvement."
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