According to the NPD report, Restaurant Density is now at the lowest in ten years.
With the decline in restaurant units, restaurant density (units per million population) is at its lowest level in the past ten years, dropping from 1,992 units per million in fall 2007 to 1,924 units per million in fall 2016, based on NPD’s Fall 2016 ReCount®, which includes restaurants open as of September 30, 2016.
This decline punished the Independent Restaurants far more than the Corporate Chains.
Independent restaurant units decreased by four percent and density declined from 1,132 units per million a decade ago to 1,002 units per million in fall 2016, reports NPD. On the flip side, chain restaurant unit counts grew by one percent in the fall 2016 increasing to 297,351 units.
The ending quote sums it all up
“This is the most significant drop in total U.S. restaurant counts since the recession,” says Greg Starzynski, director- product management, NPD Foodservice. “If consumers continue to reduce their restaurant visits, we expect the number and density of restaurant units will continue to decline in response to the lower demand.”
At RBS, our local Chicago data leads us to believe a great deal of the recessionary environment has to do with factors like increased cost to operate, a shift in consumer tastes, lack of capital investments, but even more-so that Independent Restaurants are failing to connect their message with consumers via Online Brand Strategies. The first ones to close seem to be the ones that are not transitioning to online branding.
If you can’t reach a wider audience with your branded message, then you have limited your ability to increase your market share. Failing to push your message to reach new customers will limit your growth prospects, which you’ll realize during recessionary downturns like now. Hindsight is 20/20.