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BON APETIT

4,000 down, 50,000 to go. There are 400,000 restaurants in the U.S. That is 1 restaurant for every 750 people in the United States. 1% of them have shut down in the last year. 50 year old Baby Boomers with a $25,000 401k balance are realizing that maybe they shouldn't eat out 5 days a week. Brown bagging it and cooking hamburgers on your George Foreman Grill are a lot cheaper. The net result will be the implosion of restaurants all over the country. We may have to make due with only 350,000 restaurants. The largest traffic decline in 28 years will continue for decades. This ain't your father's economic recovery.

NPD Spring 2009 Restaurant Count Shows Units Down by 4,000

Chicago, July 27, 2009 – There are 4,000 fewer restaurants in the United States this spring than there were last spring, according to The NPD Group, a leading market research company. NPD’s Spring 2009 ReCount®, which is a census of commercial restaurant locations in the United States compiled in the spring and fall each year, shows restaurant industry units down -1 percent, or about 4,000 units, compared to no growth in spring 2008.  

According to NPD’s Spring 2009 ReCount, collected from April 1, 2008 to March 31, 2009, major chains (500+ units), were up +1 percent. Midsize chains (100-499 units) and all other system sizes including independents declined.  In terms of restaurant styles, the family dining segment continues to contract across all system types while the  largest quick service restaurant (NYSE:QSR) segment showed no unit growth overall versus last spring. The fine dining segment saw the sharpest decline in units.

2009 versus 2009 Restaurant Unit Counts
Percent Change from Year Ago
  Total
Restaurants
QSR Family
Dining
Casual
Dining
Fine
Dining
TOTAL RESTAURANTS -1 0 -2 0 -4
  MAJOR CHAINS (500+ Units) 1 1 0 2 na
  MIDSIZE CHAINS (100-499 Units) -1 -1 -5 2 6
  MINOR CHAINS (50-99 Units) -2 -1 -6 -2 6
  SMALLEST CHAINS (3-49 Units) -1 -1 -2 0 1
  INDEPENDENTS -2 -2 -2 -1 -7

Source: The NPD Group/ReCount®

“It’s clear that independent restaurants and smaller chains have been most impacted by the slower economy,” said Susan Kleutsch, director, product development-foodservice at NPD. “The recession appears to have weeded out restaurants performing poorly prior to the economic downturn, and this seems most true for independents and smaller chains that are likely having a hard time competing with the resources and marketing power of major chains.” 

In terms of restaurant unit counts by U.S. Census Regions*, declines ranged from no growth to down -2 percent. The hardest hit is the West North Central Census Region, where units declined by -2 compared to last spring.  On the other end of the spectrum, unit counts were flat in the East South Central, West South Central, Mountain, and Pacific regions.  

NPD Reports U.S. Restaurant Traffic Decline Steepest in 28 Years- High unemployment, tight reins on spending, and cut backs by households with children contribute to decline

Chicago, July 20, 2009 – Restaurant traffic, still feeling the impact of rising unemployment and thrifty consumers, declined in the spring quarter ending May 2009, according to The NPD Group, a leading market research company. NPD’s Consumer Reports on Eating Share Trends (CREST®) reports that total restaurant industry traffic declined -2.6 percent for this year’s spring quarter versus the same quarter last year. This is the sharpest decline in industry traffic since 1981.   

According to NPD’s CREST®, consumers, especially households with children, cut back their visits to all segments of restaurants. Parties including children, which represent a third of industry traffic, and adults from households with children, have been cutting back on restaurant visits for the last three quarters. Over half of the industry’s decline this past quarter traced to fewer supper visits from parties with kids. Visits by adults in households without children were stable in the spring quarter.

Traffic was down -2 percent at quick service restaurants (QSR)/fast food, marking seven of the last nine months with declining customer counts. Casual dining declined -4 percent and midscale was down -6 percent. While checks rose +2% in the quarter, the rate of increase failed to offset the decline in traffic; yielding a one percent decline in consumer spending at commercial foodservice this quarter 

“The commercial foodservice industry has been struggling since last fall, and it appears that as unemployment increases the struggle is increasing,” says Arnie Schwartz, president of U.S. foodservice at NPD. “Dealing, value menus, and attractive price points seem to be supporting some operators who are holding on. Menu innovations in the fast casual and QSR segments have also helped to capture occasions.”

Consumers cut back on their foodservice visits at each of the main meal occasions. Supper continued to absorb the steepest decline as consumers pulled back on supper visits at both QSR and full service restaurants and across both on-premises and off-premises visits. Morning meal and lunch also declined across all three segments this spring and each contributed about a fourth of the industry’s loss. QSR fared a little better with morning meal and lunch visits than full service restaurants, but still showed softness.

"It is going to take continued innovation, creativity, and perseverance to capture share in a market where the pie may not be growing in the near term," said Schwartz.

NPD also reports that the total number of restaurant units in the United States declined this spring from last spring. NPD’s ReCount®, which is a census of commercial restaurant locations in the United States compiled in the spring and fall each year, shows restaurant industry units down -1 percent, or about 4,000 units, in spring 2009 compared to no growth in spring 2008.