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NPD: All the Dealing Hasn’t Moved the Needle

When the good news is that quick-service restaurants’ customer counts are flat, you know times are tough. But that’s how it is with the report issued today by researcher The NPD Group. Despite all the ballyhooed “social media” that consultants have pushed operators to use, despite Groupon and other daily-deal channels and in spite of a torrent of value-priced bundles and heavy R&D spending on new or reformulated menu items, customer visits to restaurants aren’t increasing.

Source: The NPD Group/CREST©, quarter ending September 2011

According to its CREST data, QSR traffic was up 1% during this year’s first quarter but has been flat (vs. year-earlier levels) in the last two quarters. Midscale restaurants are having the most difficult time, with customer traffic down 4% in 2011’s third quarter. And that’s down compared with a year ago, when traffic was off 3%.  Casual dining was down just 1%, but again that’s compared with a year ago, when traffic also was down 1%.

Fine dining is recovering but it had fallen so far (-14% in Q3 of 2009) that the 3% improvement in Q3 2011 doesn’t even get it back close to where it was. And upscale dining is only 1% of total restaurant customer traffic.

All that puts overall restaurant customer traffic at +0.2% for Q3. Not much of a recovery, eh?

What happened? “Consumers held tight to the foodservice dollars this year. Even the deals that helped drive traffic over the past few years weren’t as effective this year.” Said NPD analyst Bonnie Riggs in the company’s release. But she remains confident about the future. “However, it is evident that new product offerings, innovation and marketing support most evident in the fast-casual segment, fast-food hamburger, coffee/donut/bagel categories and convenience-store foodservice were successful in getting consumers a reason to visit more.” NPD sees 2011 ending with flat traffic growth for all four quarters, but it forecasts a 1% increase in customer counts for 2012.

NPD says the average check rose 1% in Q1 and 2% in both Q2 and Q3, but much of that is attributable to price increases.

● BurgerBusiness.com reported earlier this week that Hungry Jack’s (Burger King) in Australia had announced via Twitter that it was pulling its Angus burgers off the menu to make room for better items. It wasted no time swapping new for old.

What the chain has labeled its new “Better Tastes Menu” begins with four “Premium Choices” sandwiches (at left) that clearly are intended to match rival McDonald’s upscale “M Selections” menu. Hungry Jack’s begins with two new burgers and two new chicken sandwiches. The BBQ Bacon Angus XT and Swiss Mushroom Angus XT burgers are hyped in TV ads as being thicker beef patties. On the other side are Swiss Avocado Chicken Tendercrisp and Cheddar Swiss Chicken Tendercrisp sandwiches.

These continue a brand makeover that Hungry Jack’s began in October by adding organic-beef burgers (the Country Burger line) and by tweaking its longtime tagline to “Hungry Jack’s Makes it Better.”  Clevenger BBDO, Sydney, is the agency.

McDonald’s M Selections menu is more extensive but it had a head start. It began in 2009 with the Grand Angus and Mighty Angus sandwiches but since, having been broadened to include breakfast with items such as its Boston Deli Bagel sandwich.

It should be interesting to watch McDonald’s responses to Hungry Jack’s new more-sophisticated. One ace it is believed to have up its sleeve is the long-awaited introduction in Australia of the McRib sandwich as part of its Olympics promotions next July. DDB Sydney handles McDonald’s there.

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