There has been a lot of buzz about the strength of independent restaurants, even to the point of some saying independents were doing better than major chains. A clear understanding of restaurant performance begins with defining the landscape, says The NPD Group, a leading global information company. Visits to independent restaurants were down 3 percent in the first quarter of this year from a year ago and consumer spending was flat; independent restaurant unit count dropped by 4 percent, reports NPD, which continually measures the foodservice industry in multiple ways. Although overall the current state of independent restaurants overall isn’t positive, there are some independent restaurants in the U.S. that are succeeding.
The decline in customer visits to independents is largely a reflection of the fact that independent restaurant unit count dropped by 4 percent. A 4 percent decline in unit count but only a 3 percent decline in visits suggests that there are some of the 323,456 remaining independent restaurants in the U.S. growing. For example, independent operators doing well enough to order from broadline foodservice distributors increased their dollar spend by 2 percent and cases ordered from these distributors were up slightly in the first quarter compared to year ago, reports NPD.
There are also those independents successful enough to expand to 3—19 units, which NPD classifies as micro-chains. Micro-chain counts, particularly in major metro areas, are increasing and this diverse segment of restaurants often reflects emerging trends in food and customer experience, which often enables success. Micro-chain case orders from broadline foodservice distributors grew by 3 percent in the first quarter compared to year ago.
In terms of independents doing better than major chains, it’s a David versus Goliath scenario to measure their visit growth against each other. Major chains represent 64 percent of total industry traffic and independents, which NPD defines as 1—2 units, represent 22 percent of visits. In the first quarter of the year, major chain visits were up one percent compared to the 3 percent visit decline for independents. Consumer spending at major chains increased by 3 percent and spending was flat at independents.
“However you define ‘independent’ restaurants, the macro environment is not generating demand growth,” says David Portalatin, NPD’s vice president, industry analysis and author of Eating Patterns in America. “But even in this challenging environment there are many examples of major chains, micro- chains, and independents that are thriving because they have a differentiated experience, superior quality, and excellence in execution. These fundamentals are key to restaurant success at every segment of the industry and in any macro-economic environment.”
News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.