Restaurant Traffic

Restaurant News N ATI O N'S at. TAKING A DIFFERENT ROUTE BUILDING TRAFFIC IN A STAGNANT ENVIRONMENT Traffic weakness has persisted through most of 2014 with an average YOY decline of -1.2% through July. +0.1% JANUARY FEBRUARY MARCH APRIL JUNE JULY -2.2% -1.7% -1.4% -1.8% -1.1% The New Normal Today's traffic trends are among the worst in decades. And traffic is not likely to improve dramatically any time soon. Traffic growth is projected to average no more than 0.5% annually through 2022. That compares with an average annual growth rate of 2.1% from 1981-2001. Today's traffic trends are among the worst they've been in decades even better than during past periods of economic | distress, including the recessions of 1981-1982, 1990-1991 and 2001 Worse still, traffic is not projected to improve dramatically any time soon. YOY Traffic Trends +1.4% 1981-1982 +1.4% 1990-1991 +0.8% -0.5% DECLINE 2001 "THE GREAT RECESSION" 2007-2010 +0.2% 2011-2013 LITH Long Road to Recovery Economic recovery has been extremely slow since "The Great Recession," and traffic weakness has continued for many years. The industry has a long way to go to recover more than a billion lost visits during that time. Consumer behavior has shifted in fundamental ways – perhaps for good. An uneven economic recovery has left middle America feeling squeezed. Consumers are more cautious about restaurant spending. 2$ People have gotten used to cooking at home, and retail outlets have become a significant competitor. Millennials are not eating out as much, but capturing that group will be key to any real growth. Shifting dayparts: Breakfast and evening snack have shown growth, but traffic at traditional lunch and dinner dayparts IS declining. Bucking The Trend There is a bright spot: The fast-casual segment has seen healthy traffic growth so far in 2014, with an average year-over-year traffic +3.9% through July compared to the -1.2% seen across th entire industry during the same period.