Restaurants Doing Well Despite Slight Decline

Independent commercial restaurant operators are expected to spend roughly $39 billion with foodservice manufacturers and broadline foodservice distributors in 2018, according to recent data from The NPD Group. That amount represents 15 percent of total restaurant operator spend this year.

The market research company found several signs that independent restaurants are doing well despite a slight decline. Between September 2016 and 2017, the number of independent restaurant units declined 3 percent to 346,105, however, independent restaurants still represent just more than half of the total commercial restaurant market.

NPD also found that independent restaurant visits dropped 1 percent between January and March compared to the same period in 2017, while total restaurant visits and chain traffic were flat. Still, customers made 13 billion visits to independent restaurants in that quarter. In all, there were 60.5 billion total foodservice visits made during the quarter.

Another sign the market is doing well is that independent operators increased their purchases with broadline distributors by 2 percent in the quarter ending March 2018, compared to the same period in 2017.

“Independent restaurant operators do face different challenges than chains since they have less resources and capital to withstand tougher times, but there are many that are thriving and contributing to the overall vibrancy of the U.S. foodservice market," Warren Solochek, NPD senior vice president, industry relations, said.

Paul Parr, vice president at TriMark Hockenbergs and vice chairman of FEDA’s Board of Directors, said the NPD report mirrors some of his recent experience. “We are not seeing an increase of independent operators in our market but find the good operators are doing better,” he said. “I think the low unemployment rate is helping the industry as a whole—people have the money to go out more often. The program for all of us is the margins for these sales keeps decreasing.”

As of yet, Parr added, TriMark Hockenbergs has not seen the spending increase indicated by the report. “We currently are seeing a dip in sales from a year ago, but the economy does seem poised to catch up the second half of the year,” he said. “If this report is correct, it definitely will have a positive impact on sales for distributors.”