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Restaurant traffic expected to slow as population ages

Restaurant traffic growth is projected to lag the nation's annual population growth over the next 10 years as aging baby boomers dine out less frequently, according to The NPD Group.

In its study, “A Look into the Future of Foodservice,” NPD projected that annual visits to restaurants would increase 8 percent by 2019. That works out to about 0.8 percent per year, which lags the 1.1-percent annual growth rate in the nation’s population expected during that time.

Demographic factors, mainly the aging of the American population, will provide significant headwinds to restaurants trying to build traffic over the next decade, NPD found.

“The aging effect on the restaurant industry will be slightly negative because of aging baby boomers,” said Bonnie Riggs, NPD’s restaurant industry analyst and the author of the report. “A greater share of visits will source to those 50 years and older in 2019, but as consumers age, they become less frequent restaurant users. This means the restaurant industry will have heavier dependence on lighter buyers.”

There are ways to market to senior citizens, as Denny’s has done by forming a partnership with AARP. Organization members can present their AARP cards to receive $1 coffee all day and 20 percent off the entire table’s bill between the hours of 4 p.m. and 10 p.m. Vice president of marketing John Dillon told Nation’s Restaurant News earlier this year that 40 percent of Denny’s business comes from guests age 50 or older.

Demographics expert Peter Francese, the founder of American Demographics magazine and a speaker this year at Nation's Restaurant News' Multi-Unit Foodservice Operators conference, has said that baby boomers often bring family members with them to eat, especially grandchildren. As such, restaurants need to consider compelling family offers such as a kids-eat-free program or at the very least make sure the dining space is family-friendly and kid-appropriate.

NPD analyst Riggs said there is more room for growing traffic over the next 10 years by addressing newly frugal consumer behaviors rather than trying to shift marketing and operational focus to satisfy older consumers.

“In addition to being hit hard by the recession, Americans are eating more suppers at home, and fewer women are entering the workforce have negatively impacted restaurant industry traffic,” she said. “The current trend momentum may not appear favorable for the industry moving forward, but it’s the area where the industry has the greatest opportunity to change the direction of the forecast. There isn’t much that can be done about the aging of the population and population growth.”

Riggs added that the breakfast and evening-snack dayparts, where there has been more robust growth than others over the past few years, present the most likely opportunities for restaurants to gain sales momentum.

“Forecasts are something to be worked against, but are not cast in stone,” she said. “They are used to assess potential opportunities and risks for the purpose of long-term planning. The future course can be altered.”

Contact Mark Brandau at [email protected].

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