Three of my favorite local restaurants went out of business in past few months -- a steak house, a Chinese restaurant and a funky diner that sold the best hot dogs on the East coast, or so they claimed. Those were three places my family I had come to rely on for nights out whenever we didn’t feel like cooking or wanted to entertain friends with a special meal.
Sure there are others around, but we still haven’t found a replacement for the streak house that featured some of the best filet mignon without having to drive into Manhattan. It’s a scenario that appears to be playing out coast to coast according to report released this week by the market research firm The NPD Group.
According to NPD’s Fall 2010 ReCount, which is a census of commercial restaurant locations, the number of restaurants declined by 5,551, or 1 percent from a year ago. But that figure is skewed by the fact that the number of chain and most fast food restaurants remained the same, which means the loss actually reflected independent restaurants which dropped by 2 percent compared to a year ago.
Of those restaurants that closed, 2,122 were what are considered quick service restaurants such as diners, while 3,429 were full service restaurants, which includes casual dining, mid-scale, and fine dining.
Greg Starzynski, director, product development-foodservice at NPD says that these past two years have been particularly tough for independents, which don’t have the resources to compete with the chains. He adds that “over the past few years we've lost several thousand independent restaurants.
Traffic declining
According to The NPD Group’s CREST, which continually tracks consumer usage of commercial and non-commercial foodservice outlets, restaurant traffic has been down since January 2009, although the visitor declines are softening.
For year ending November 2010, U.S. restaurant traffic declined by 1 percent compared to a year ago. This is an improvement over the 3 percent declines in visits for year ending November 2009 compared to the prior year.
What’s amazing is that last year we saw nearly three times as many restaurants go under as the year before and five times as many as went belly up in 2008, the first year of the recession. Granted, there’s a bit of a lag effect going on here, but 2010 seems to have been a particularly brutal year for independent restaurant owners.
According to NPD, over the past two years U.S. consumers pulled back on their use of restaurants, and the industry lost 2.4 billion visits from year ending November 2008 thru November 2010, from 61.5 billion visits to 59.1 billion visits. As the economy begins to improve, Americans have started adding more restaurant visits back into their routines, but high unemployment continues to hamper the industry's growth.
