August 2, 2022

Restaurant Visits Slumped in Q2 Amid Rising Inflation

Restaurant visits in the second quarter were down year over year as inflation and rising prices saw consumers cut back on spending.

Physical and online traffic to restaurants slumped by 2% over a year ago and remain 6% below pre-pandemic levels in Q2 2019, according to data from The NPD Group. Consumer restaurant spending increased 2% year over year and by 3% over pre-pandemic Q2 2019 levels, reflecting increased costs to restaurant-goers.

In addition, visits to quick service restaurants, which represent 82% of total restaurant traffic, declined by 2% year over year and are 3% below pre-pandemic levels for the same period in 2019. Data from Placer.ai underscores the current reality for QSRs as inflation tempers spending: while year-over-year visits to burger leaders like McDonald’s, Wendy’s, and Burger King are up, for example, year-over-three-year visits are down. Meanwhile, smaller regional burger chains are posting impressive numbers. Monthly Yo3Y visits to In-N-Out Burger, Whataburger, SONIC Drive-In, and White Castle in May 2022 grew by 38.5%, 14.0%, 20.8%, and 8.5%, respectively.

“This may indicate that the burger leaders’ subdued foot traffic numbers do not necessarily reflect a waning demand for QSR,” said Placer.ai’s Shira Petrack. “Rather, as more and more people look to reign in unnecessary spending, consumers may be limiting their overall spending and this category is able to take advantage of a wider percentage of overall QSR visits.”

Investor demand has nonetheless remained strong for net lease and QSRs despite waning traffic, however. According to Lanie Beck, Director of Corporate Research, Marketing & Communications, Northmarq, tenants are actively expanding in the space, with Sonic leading the way. Beck says the chain plans to open 1,000 new locations over the next 10 years, while other established brands, including Chipotle, Jack In The Box, Starbucks and Taco Bell, have similarly communicated plans to open new locations by the hundreds.

Full-service restaurant visits, which account for 18% of restaurant visits, were down 3% year over year and by 20% compared to the second quarter of 2019.

“Consumers continue to deal with rising inflation and higher prices. We see three ways consumers respond to higher menu prices. They trade down to lower-priced items, cut back on the number of items ordered, or reduce restaurant visits altogether,” said David Portalatin, NPD Food Industry Advisor and author of Eating Patterns in America. “Operators and manufacturers can win in this environment by differentiating value, understanding that value doesn’t always translate to the lowest price. Quality and value become a critical differentiator when consumers spend on a restaurant meal during these challenging times.”